Posts Tagged ‘Quantitative Easing’

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Will the Dollar Collapse Due to Low Interest Rates and Quantitative Easing? A One Minute Perspective

To enable businesses to access financing, the Fed has made it clear that it is intending to reach for its proverbial wallet as many times needed and to act aggressively in terms of fiscal policy. With respect to the monetary policy, the Fed has made it clear that it is willing to ensure that the so called digital wallet is always full. After each crisis passes, more aggressive policy changes […]

The Money Supply (Monetary Base, M1 and M2) Defined & Explained in One Minute

The money supply tells us how much physical currency as well as assets so liquid that they are pretty close to the acting physical currency exists in the economy of a country at a certain point of time. This data is usually reported by the country's central bank and the way it is measured can differ from country to country. In the US, for example, the most popular data points are Monetary Base It tells us […]

Monetary Easing (aka Quantitative Easing, QE, LTRO, APP, and So On) Explained in One Minute

Some people call it monetary easing. In the US, it is called Quantitative Easing. In Europe, they call it the Long-Term Refinancing Operation, and now it is called Extended Asset Purchase Program. These fancy terms actually tell us something very simple, that the central banks created money. The process works like this. The central banks waves its magic wand and creates money. It then […]

What Is Quantitative Easing — QE? — Explained

When an economy is in danger of slipping into a recession or depression, governments can employ a strategy known as quantitative easing known as QE. Quantitative easing is a monetary policy instituted by central banks in an effort to stimulate the local economy. By flooding the economy with a greater money supply, governments hope to maintain artificially low interest rates while providing consumers with extra money to spend more freely, which can sometimes lead […]

Does Quantitative Easing Cause Inflation?

If you are going to print large amounts of money, it is going to increase inflation. We are going through an economic experiment. What we are trying now is to keep the economy going. Ever since the financial crisis in Japan, the Japanese population is shrinking and aging, the economy is staggering and not growing. The number of people in the economy is the biggest determinant of the GDP. Same is the case in the Europe, as the population […]

The Economist Explains — Quantitative Easing

The Federal Reserve or the US central bank announced a new program of quantitative easing. It is the creation of money to boost the economy. Like Ivan Pavlov's dogs experiment, the stock markets elevated as it has done on the previous occasions when the Fed announced similar measures. Are these rounds of monetary easing actually neccessary and will they succeed in boosting the global economy. Quantitative easing involves the creation of new money, not the literal […]

Quantitative Easing Forces Euro Downward

The Euro is having its fair share of problems these days as the currency fell to its lowest against US Dollar in 9 years. The root cause of this slide is lower interest rates in Eurozone. The US Fed saved the day in USA by bond purchases of $85 billion every month. This served to drive interest rates down. The problem for Euro is that quantitative easing forces the Euro downward as result of lower […]

What Is Quantitative Easing

Quantitative Easing occurs when the Central Bank of a nation purchases securities in order to increase the National Money Supply. Inflating the balance sheet could give the economy a boost. For example the national economy of America is in a recession. To help simulate economic activity the Central bank of America issues or creates new money that is then used to buy Financial Assets like bonds from other banks in the country. These banks can loan […]

Quantitative Easing — How It Works

In this video you will learn about Quantitative easing and how it works. The Bank of England's Monetary policy has been purchasing assets with the money that the Bank creates electronically. Often known as Quantitative easing this policy is designed to inject money directly in to the economy. This in response to the sharp fall in demand as businesses and consumers reduce their spending. In short there is no money inthe economy. The aim […]

Quantitative Easing

Quantitative easing is a Government Monetary Policy occassionally 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 increase lending and liquidity. Central banks tend to use Quantitative easing when Interest rates have already been lowered to near zero percent levels and have failed to produce the desired effect. […]