The mother of all crashes is coming and it won’t be fun

Re:The mother of all crashes is coming and it won’t be fun by romankolpak on Sunday December 19, 2021 @04:25AM (#29612557)

How would quantitative easing affect the next crash? It seems like a thing that distinguishes this time from all other ones. Governments have more control over the economy with QE: they can inject liquidity into markets and boost spending whenever this is needed, so economy seems less likely spin out of control during a crash.

Did we learn how to tame and limit the blast radius of crashes or am I misunderstanding QE?

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Re:The mother of all crashes is coming and it won’t be fun by lottin on Sunday December 19, 2021 @04:40AM (#29612614)

QE doesn't boost spending directly. QE is about buying bonds, so that there's more money in circulation (and fewer bonds), in the hope that the resulting low interest rate environment will lead to more borrowing and consequently to higher levels of consumption and investment.

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Re:The mother of all crashes is coming and it won’t be fun by adflux on Sunday December 19, 2021 @04:28AM (#29612566)

Fed cant qe with inflation approaching 10%.

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Re:The mother of all crashes is coming and it won’t be fun by neilwilson on Sunday December 19, 2021 @05:38AM (#29612862)

QE actually reduces the amount of money flowing in the economy, not increases it.

What it is is an exchange of assets that pay, say, 2.5% for once that pay federal funds rate. That's a net reduction in income for banks.

QE is just an assets swap attempting to reshape the longer term yield curve that hasn't been pulled down by setting rates near zero. It's got nothing to do with 'injecting money'.

For that you need to look at the fiscal flow data: spending less taxes.

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