Re:Bitcoin consumed 134 TWh in total during 2021
by scottiebarnes on Sunday January 02, 2022 @09:06PM
(#29776504)
https://www.investopedia.com/terms/q/quantitative-easing.asp
Quantitative easing (QE) is a form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to
increase the money supply and encourage lending and investment. Buying these securities
adds new money to the economy, and also serves to lower interest rates by bidding up fixed-income securities. It also expands the central bank's balance sheet.
I don't know why you don't think creating money and buying bonds and mortgage securities on the open market counts as money creation. Or if you're being particularly semantic about the mechanical flow of this money. None of these occur without the central bank changing digits in a database which magically allow new money to exist.
Bank reserves are not circulating money because they cannot be spent. [1]
> The interbank mechanics are unimportant...
They are literally the only important thing. That's all we've been talking about.
The bank having these reserves frees up room for the bank to lower their interest rates and in turn create more loans. See, it's this lending process that creates new circulating money. The Fed issuing 100T of reserves and giving it to BoA would not change the circulating supply one iota in and of itself.
> ... the point is the value is created at will ...
Again, no, no value is created by this operation. It's entirely neutral. What happens is these lower-interest rate loans (coupled with the obligation to repay same) increase the viability of business models, fund productive activities in the economy and back the newly created money. This is where new value is generated. Not in creating reserves.
> ... creating inflation ...
Again, no. Inflation is a measured effect. It has nothing to do with supply per se in the federal reserve model. Just ask Japan. They went absolutely ham on QE since the 1980s and they haven't seen inflation since 1995. [2] So much so it's actually been very problematic for them.
> ... is a decision of a few powerful individuals.
Yeah like every Supreme Court decision ever. These individuals are accountable to congress. This is called representative democracy.
Scottie, and I'm going to assume your name is Scottie - I mean this without disrespect. Please audit an economics class. And maybe a civics class. Thus far everything you have suggested is trivially wrong.
[1] https://en.wikipedia.org/wiki/Bank_reserves
[2] https://fred.stlouisfed.org/series/JPNCPIALLMINMEI