Re:What Economists Still Don’t Get About the 2008 Crisis
by pdonis on Monday July 30, 2018 @08:20PM
(#17649497)
> Which I believe is the entire point of QE.
Not really. The point of QE is to stimulate economic activity. Unfortunately, buying bonds doesn't do that either if banks don't use the newly printed money to make loans.
Re:What Economists Still Don’t Get About the 2008 Crisis
by sjg007 on Monday July 30, 2018 @09:51PM
(#17649936)
probably went to credit cards, some house price stabilization and the stock market.
Re:What Economists Still Don’t Get About the 2008 Crisis
by pdonis on Monday July 30, 2018 @11:39PM
(#17650362)
If you mean the money the Fed printed as part of QE, no, it went into the banks' reserve balances at the Fed, where it has been ever since.
Re:What Economists Still Don’t Get About the 2008 Crisis
by sjg007 on Tuesday July 31, 2018 @10:53AM
(#17653627)
Which frees up other money for other things.
Re:What Economists Still Don’t Get About the 2008 Crisis
by pdonis on Tuesday July 31, 2018 @12:45PM
(#17654696)
What other money?
Re:What Economists Still Don’t Get About the 2008 Crisis
by pas on Sunday August 05, 2018 @11:17AM
(#17691720)
It allowed them to create more money. Fractional reserve requirement is something like 1/20, no? But usually the capital (bank company equity) requirements (like Basel III) were the harder to meet, so who knows how much new money banks created. (Actually it can be easily looked up, and not much, because inflation did not jump.)
Usually QE allowed banks to roll over mark-to-market assets that turned into garbage into sane cash to satisfy solvency and liquidity requirements. And of course this led to price stability.
Which I believe is the entire point of QE. I find the current incarnation of QE (buying bonds) unimaginative at best. I get that helicopter drops are politically hard, but there's gotta be something better than this.