Bears-Quantitative-Easing-federal-reserve

Even the bears know, Quantitative Easing is just printing money

Wondering what the hell the Federal Reserve is up to?  Have no idea how the US financial system works?  Why does Ben Bernanke think printing money is the solution?  Where is Goldman Sachs involved in all this?

This video will answer these question and help explain why the US is in the position we are today.  Things are really starting to seem effed up…………to say the least.  If you pay attention to this video, you’ll learn more in 5 minutes then you did in your entire high school economic class.

What Does Quantitative Easing Mean?
A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

Let’s Explore the wonderful world of quantitative easing with cartoon bears. (I think they’re bears anyway…..could be dogs)

 

Quantitative easing (QE) is a monetary policy tool used by some central banks to stimulate their national economies when conventional monetary policy has become ineffective by increasing the money supply and the excess reserves of the banking system.[1] A central bank implements Quantitative easing by purchasing financial assets, including government bonds, mortgage-backed securities and corporate bonds, from banks and other financial institutions with money it has created ex nihilo (“out of nothing”)[2][3] in a process referred to as open market operations. This action also raises the prices of the financial assets bought, which lowers their yield (as long as the yield is above zero).[4] Quantitative easing shifts monetary policy instruments away from interest rates, towards targeting the quantity of money. However, the goals of monetary policy (including inflation targets) remain unchanged.[5]

Expansionary monetary policy normally involves a lowering of short-term interest rates by the central bank through the buying of short-term government bonds (termed open market operations).[6][7][8][9] However, when short-term interest rates are either at, or close to, zero, normal monetary policy can no longer function as the purchase of short-term government bonds will no longer lower interest rates. Quantitative easing may then be used by the monetary authorities to further stimulate the economy, by expanding the excess reserves in the banking system and lowering interest rates further out on the yield curve.[10][11] Risks include the policy being more effective than intended or of not being effective enough, if banks opt simply to sit on the additional cash in order to increase their capital reserves in a climate of increasing defaults in their present loan portfolio.[2]

http://en.wikipedia.org/wiki/Quantitative_easing

 

 

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