# Quantitative Easing explained



## gav (14 November 2010)

Quantitative Easing explained... :


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## builder2818 (14 November 2010)

LOL! That is hilarious!


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## wayneL (14 November 2010)

Brilliant and on the money.


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## nukz (14 November 2010)

haha great find i loved it


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## Knobby22 (25 November 2010)

Keynes said quantative easing is like trying to get fat by buying a bigger belt.

It was tried under Franlin Roosevelts Presidency and was a huge failure.

If the USA keep going on this path they will force Europe to provide trade barriers and encourage China to reverse their decision to depreciate against the dollar and other countries may set up trade barriers.

Theses are the sort of things that caused the Great Depression.
Can the US Fed get some other opinions not based on their neo-classical fallacies before it is too late? Its all groupthink.


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## mr. jeff (25 November 2010)

I agree it's funny, but it's also scary that we go along with this.
I guess we went along with the weapons of mass destruction too.

So how do we profit off this US printing, is it as simple as buying gold, or should we be shorting the US markets and the US dollar, what else?
I have read that things in the past quarter are looking up in the US, good profit reporting, pickup in employment. Is this just a blip?


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## Knobby22 (25 November 2010)

Well, Murdochs backing Sarah Palin for President.

I reckon the way to make money is go short USA. In fact in hindsight that would have worked over the last 5 years.


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## dhukka (25 November 2010)

One of the many very good articles on QE by John Hussman in recent weeks.



> Bubble, Crash, Bubble, Crash, Bubble...
> 
> Given that interest rates are already quite depressed, Bernanke seems to be grasping at straws in justifying QE2 on the basis further slight reductions in yields. As for Bernanke's case for creating wealth effects via the stock market, one might look at this logic and conclude that while it may or may not be valid, the argument is at least the subject of reasonable debate. But that would not be true. Rather, these are undoubtedly among the most ignorant remarks ever made by a central banker.
> 
> ...


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## GumbyLearner (25 November 2010)

Cheers gav that's funny stuff. 

I also had to have laugh at Richard Quest's example on CNNNNN. 

You know that guy they picked up in Central Park, New York a couple of years ago.

http://www.reuters.com/article/idUSN1832900220080419


At least in this vid, his substance of choice is grog.


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## GumbyLearner (25 November 2010)

Here's another great example

"That's straight up, Gangster" ROTFLMAO


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## Agentm (2 December 2010)




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## Dowdy (3 December 2010)

Agentm said:


>






lol

H.M.M.M.M.M.M.

Broccoli man to the rescue - "You feel me!"


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## Vicki (3 December 2010)

Hi guys,
Unfortunatley my silly computer/internet connection wouldn't play the audio for those U-tube media files.
I have a vague understanding of the concept 'quantative easing' refering to the 'Fed'.

Could someone give me a brief description of what this really means?


Also, I've been watching Glen Beck on foxtel, and he's also been bang'n on about the above, & also how E.U. is also in dire-straits, with Greece,Ireland,Italy,Portugal & Spain all crying poor & how this might spell big problems for Europe?  

Where does this leave & potentially effect Australian economy?

Kind regards,
                 Vicki


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## Bat_Ears (4 December 2010)

Vicki said:


> Hi guys,
> Unfortunatley my silly computer/internet connection wouldn't play the audio for those U-tube media files.
> I have a vague understanding of the concept 'quantative easing' refering to the 'Fed'.
> 
> ...





Quantative easing is simply printing more money and giving it to the banks.


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## Vicki (4 December 2010)

So this mysterious entity called the "federal reserve" just keeps printing out money to give to the banks, who in turn buy treasury bonds yes, which is really like printing out money & loaning it to yourself? [funny money]

 well it appears their economy is really living on borrowed time [pardon the pun].

What's stopping their dollar from becoming cheaper than wall-paper, like the paso...Nukes? Military interventions in oil rich states?

What are your predictions for the next year or so, with regard to the potential implications of this behaviour?

Regards,
           Vicki


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## professor_frink (5 December 2010)

Vicki said:


> So this mysterious entity called the "federal reserve" just keeps printing out money to give to the banks, who in turn buy treasury bonds yes, which is really like printing out money & loaning it to yourself? [funny money]
> 
> well it appears their economy is really living on borrowed time [pardon the pun].
> 
> ...




IMHO it's all pretty well a non event

The whole thing basically works like a giant asset swap, with the end result is that banks end up with large increases in their reserves and the fed attempts to manipulate longer term yields to try and spur demand.

Essentially you are really only going to see that money filtering into the real economy if people are willing to borrow money and banks are willing to lend a lot of it out. So far that doesn't really seem to be happening.

Most of that is largely unimportant for the short term though, the video that agentm posted up largely sums up the mentality of the markets at the moment. The market is currently trending up, riskier assets like the nasdaq, small caps, commodities, etc are leading the way higher, and the fed wants higher asset prices, so if you are trading the short term moves at the moment, then buy the dips!


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