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Our last (and according to Yellen, et. al., our final)[1] QE was in October 2014. Is there a reason why you continue to talk about QE in the United States in t
by linkregister 12y ago
Our last (and according to Yellen, et. al., our final)[1] QE was in October 2014. Is there a reason why you continue to talk about QE in the United States in the present tense?
[1] http://www.cnbc.com/id/102009066 http://www.cnbc.com/id/102009066
- jhulla 12y agoQE is happening globally. As you noted, QE3 ended in the US Oct-14. On the final day of US QE3 ending, the Bank of Japan announced another round of QE in their economy. http://www.reuters.com/article/2014/10/31/us-japan-economy-boj-idUSKBN0IK0B120141031 http://www.reuters.com/article/2014/10/31/us-japan-economy-b... The European Central Bank announced QE in Jan-15. One way to think of QE is global competitive devaluation to capture global demand. QE + ZIRP or even negative interests are the primary tool of central banks now. Capital misallocation continues on a global scale.
- walterbell 12y agoHow would negative interest rates compete with cash which has a zero interest rate, or premium real estate which offers a long-term return?
- jhulla 12y agoThis is a good summary of why people might buy negative interest rate bonds: http://www.vox.com/2015/2/5/7981461/negative-interest-rates-europe http://www.vox.com/2015/2/5/7981461/negative-interest-rates-... e.g. Cash is not secure in your bank account. A government backed bond, even at negative interest, may be more secure than a cash balance. ZIRP and negative interest rates are pushing people out on the risk curve and raising asset prices. As I said in an earlier comment, IMHO, all investment decisions are bets on central banks.