The government is trading money they create, for some type of asset - in the case of QE, it could be government bonds, or other things. i.e. taking bonds 'off the market' and putting currency 'on the market'. Some day it will will reverse.
Ergo - that currency is 'backed by' an asset, i.e. government bonds, or other securities.
Obviously they have to 'create it' somehow in order for it to exist, but it's only created in exchange for assets, which are held by the central bank.
'Money printing' or 'arbitrary money creation' is when governments/central banks create money out of thin air for whatever purpose.
When a government 'prints money' to pay of debt to some other country - that's just 'printing money out of thin air' - the newly minted currency is not 'backed' by anything. This will cause hyperinflation as the value of each 'dollar' is backed by less and less, worth less and less, i.e. failure.
At some point, the Fed will release those QE assets back into the market, and take dollars out of circulation - i.e. it's monetary policy, not just printing willy nilly.
A BOND IS A LOAN, A LEGAL OBLIGATION TO REPAY
With 100's of years of financial regulation and legal apparatus and precedence, long-standing laws, process and practices it.
It's a fundamental part of the credit system.
The price of the bond on the the markets will be a function of the coupon rate, and the 'risk' associated with the issuer actually paying back.
That's why bonds can be resold because they are worth something.
PRINTING MONEY AND SPENDING IT ON MANSIONS (or whatever) IS DILUTION
It's just making 'z dollars in circulation' no 'z*n dollars in circulation' backed by the same amount of assets, ergo, each dollar worth less.
I recommend "Investopedia.com" where you can go and look up what a 'bond' is, what a 'stock' is, what 'currency' is, and what 'central banks' do, it's a great resource.
It's definitely increasing the money supply in that case. If the assets are valuated at the correct price is another issue...
The money is both created from thin air and at the same time connected to the underlying assets in the bond.
I'm leaning towards the opinion that it's more "air" than "matter" in that case, but you could argue that it's somehow reflecting the underlying economy somehow.
Yes they just “print money” actually they create it electronically, that’s how the government got the money for quantitative easing.
The reserve bank has control over the money supply. They can create more or less, and thereby regulate the inflation rate of a country.