Quantitative Easing Quotes

It's complicated.' 'So's quantitative easing. But I still get that it means printing money.

Almost every Fed chairman in the past 60 years has manipulated interest rates to brighten the economic outlook for incumbent presidents or newly elected presidents who won by large margins. The purchasing power of the U.S. dollar has fallen 94 percent in the past 100 years. The only way you can create inflation is by creating more money that is backed by the same reserve assets; the Fed is the only entity that can create more money. Ben Bernanke’s quantitative easing (QE) programs have pumped billions of unfunded dollars into the economy, thereby setting us up for massive inflation in the very near future. If this isn’t a form of financial terrorism, it is incompetence of the highest order.

One typical argument raised against Bitcoin concerns the limit on the maximum number of bitcoins that will ever be created, which Satoshi Nakamoto set at 21 million. Once reached, what could prevent someone from increasing this limit? Nothing really, but he would need the cooperation of the majority of miners for this change to be accepted. Even were the majority of miners to agree to lift this restriction, if all did not agree, then a split in the block chain would result. Those in favor of lifting the restriction would use one version of the block chain while those not in favor would use a different version. In effect, we would have two virtual currencies rather than one, the “original Bitcoin” and a “Quantitative Easing Bitcoin”. Over the long term, one would hold its value longer and better and would therefore become the preferred version while the other would drop in value. What would be your guess as to which one would hold its value longer and retain the interest of users of Bitcoin?

The euro fell to as low as $1.18605, its weakest level since March 2006, having fallen below an important support at $1.20. The common currency last traded at $1.1926, down 0.6 percent from late U.S. trade on Friday. In an interview with German financial daily Handelsblatt published on Friday, ECB President Mario Draghi said the risk of the central bank not fulfilling its mandate of preserving price stability was higher now than half a year ago. "The market took his comments to mean that he is ready to adopt quantitative easing," said Shin Kadota, chief forex strategist at Barclays in Tokyo.

I do think we’re at a turning point. The question is how strong and permanent this recovery will be,” he noted. But while these external factors are helping Italy emerge from economic decline, others — mainly events in Greece and Ukraine — could spoil any momentum and plunge the eurozone’s third-largest economy back into the doldrums. “We are definitely concerned, I see all the elements for a moderate recovery [but] there are risks coming from a number of open issues in the world,” Mr Rossi said. Mr Rossi credited the European Central Bank’s recent decision to buy government debt — known as quantitative easing — with driving the likely Italian recovery, through a weaker euro, lower borrowing costs, higher confidence and portfolio shifts. He estimated it would add about 1 percentage point to Italian gross domestic product over the next two years, but this would be in line with the rest of the eurozone — offering “no special advantage to Italy”.

Very quickly, the Obama administration lost political momentum. The obscene sight of those who had played a major role in setting the scene for the Crash (men like Larry Summers, Tim Geithner, Ben Bernanke) effectively returning to the scene of the crime as ‘saviours’, wielding trillions of freshly minted or borrowed dollars to lavish upon their banker ‘mates’, was enough to turn off even the hardiest of Mr Obama’s supporters. The result was predictable: as often happens during a deflationary period (think of the 1930s, for example), those who gainpolitically do not come from the revolutionary Left; they come from the loony Right. In the United States it was the Tea Party that grew on the back of a disdain for bankers, 6 a denunciation of the Fed, a clarion call for ‘honest’, metal-backed money, 7 and a revulsion towards all government. Ironically, the rise of the Tea Party increased the interventions of the Fed that the movement denounced. The reason was simple: once the Obama administration had lost its way, and could not pass any meaningful bills through Congress that might have stimulated the economy, onlyone lever was left with which anyone could steer America’s macroeconomy – the Fed’s monetary policy. And since interest rates were dwelling in the nether world of the first liquidity trap to hit the United States since the 1930s8 (recall Chapter 2 here), the Fed decided that quantitative easing or QE – the strategy that Chapter 8 describes in the context of the 1990s’ ‘lost Japanese decade’ – was all that was left separating America from a repugnant depression.

Indeed, the consensual nature of the EU itself has meant that EU-level institutions are far weaker than certain federal institutions in the United States. These weaknesses were made painfully evident in the European debt crisis of 2010–2013. The United States Federal Reserve, Treasury, and Congress responded quite forcefully to its financial crisis, with a massive expansion of the Federal Reserve’s balance sheet, the $700 billion TARP, a second $700 billion stimulus package in 2009, and continuing asset purchases by the Fed under successive versions of quantitative easing. Under emergency circumstances, the executive branch was able to browbeat the Congress into supporting its initiatives. The European Union, by contrast, has taken a much more hesitant and piecemeal approach to the euro crisis. Lacking a monetary authority with the same powers as the Federal Reserve, and with fiscal policy remaining the preserve of national-level governments, European policy makers have had fewer tools than their American counterparts to deal with economic shocks.

Greece can balance its books without killing democracy Alexis Tsipras | 614 words OPINION Greece changes on January 25, the day of the election. My party, Syriza, guarantees a new social contract for political stability and economic security. We offer policies that will end austerity, enhance democracy and social cohesion and put the middle class back on its feet. This is the only way to strengthen the eurozone and make the European project attractive to citizens across the continent. We must end austerity so as not to let fear kill democracy. Unless the forces of progress and democracy change Europe, it will be Marine Le Pen and her far-right allies that change it for us. We have a duty to negotiate openly, honestly and as equals with our European partners. There is no sense in each side brandishing its weapons. Let me clear up a misperception: balancing the government’s budget does not automatically require austerity. A Syriza government will respect Greece’s obligation, as a eurozone member, to maintain a balanced budget, and will commit to quantitative targets. However, it is a fundamental matter of democracy that a newly elected government decides on its own how to achieve those goals. Austerity is not part of the European treaties; democracy and the principle of popular sovereignty are. If the Greek people entrust us with their votes, implementing our economic programme will not be a “unilateral” act, but a democratic obligation. Is there any logical reason to continue with a prescription that helps the disease metastasise? Austerity has failed in Greece. It crippled the economy and left a large part of the workforce unemployed. This is a humanitarian crisis. The government has promised the country’s lenders that it will cut salaries and pensions further, and increase taxes in 2015. But those commitments only bind Antonis Samaras’s government which will, for that reason, be voted out of office on January 25. We want to bring Greece to the level of a proper, democratic European country. Our manifesto, known as the Thessaloniki programme, contains a set of fiscally balanced short-term measures to mitigate the humanitarian crisis, restart the economy and get people back to work. Unlike previous governments, we will address factors within Greece that have perpetuated the crisis. We will stand up to the tax-evading economic oligarchy. We will ensure social justice and sustainable growth, in the context of a social market economy. Public debt has risen to a staggering 177 per cent of gross domestic product. This is unsustainable; meeting the payments is very hard. On existing loans, we demand repayment terms that do not cause recession and do not push the people to more despair and poverty. We are not asking for new loans; we cannot keep adding debt to the mountain. The 1953 London Conference helped Germany achieve its postwar economic miracle by relieving the country of the burden of its own past errors. (Greece was among the international creditors who participated.) Since austerity has caused overindebtedness throughout Europe, we now call for a European debt conference, which will likewise give a strong boost to growth in Europe. This is not an exercise in creating moral hazard. It is a moral duty. We expect the European Central Bank itself to launch a full-blooded programme of quantitative easing. This is long overdue. It should be on a scale great enough to heal the eurozone and to give meaning to the phrase “whatever it takes” to save the single currency. Syriza will need time to change Greece. Only we can guarantee a break with the clientelist and kleptocratic practices of the political and economic elites. We have not been in government; we are a new force that owes no allegiance to the past. We will make the reforms that Greece actually needs. The writer is leader of Syriza, the Greek oppositionparty

The halving of crude prices since the summer has brought US and eurozone inflation below zero. Prices in Britain are rising at the slowest rate in decades. Even in Japan, where a programme of quantitative easing had succeeded in pushing up inflation, price pressures have come down sharply compared with last spring. But despite pessimists’ predictions, there is little evidence of a negative spiral of falling prices and weak demand tainting the world economy. Indeed, in January, annual retail sales in the world’s most advanced economies rose at their most rapid pace since 2006 according to Capital Economics, a consultancy. Sliding oil prices have put $250bn in the pockets of consumers in the world’s four largest economies and shoppers seem determined to spend it.

Global finance made so much hay, not through efficient markets but by riding up and down three interlinked giant global asset bubbles using huge amounts of leverage. The first bubble began in US equities in 1987 and ran, with a dip in the dot-com era, until 2007. It was the longest equity bull market in history, and it spread out from the United States to boost stock markets all over the world. The smart cash that was being made in those equity markets looked around for a hedge and found real estate, which began its own global bubble phase in 1997 and ran until the crisis hit in 2006. The final bubble occurred in commodities, which rose sharply in 2005 and 2006, long before anyone had heard the words “quantitative easing,” and which burst quickly since these were comparatively tiny markets, too small to sustain such volumes of liquidity all hunting either safety or yield. The popping of these interlinked bubbles combined with losses in the subprime sector of the mortgage derivatives market to trigger the current crisis.

Quantitative easing was designed and initiated with the specific goal of inflating stock market prices.

The primary argument for using quantitative easing is that it should lower the yields of other assets. If traditional monetary policy operates primarily by altering the short-term interest rate, quantitative easing seeks to affect the interest rates of longer term and alternative assets. The key idea here is a ‘portfolio balance channel’. Given that assets are not perfect substitutes for one another (they have different values, different risks, different returns), taking away or restricting supply of one asset should have an effect on demand for other assets. In particular, reducing the supply of government bonds should increase the demand for other financial assets. It should both lower the yield of bonds (e.g. corporate debt), thereby easing credit, and raise the asset prices of stocks (e.g. corporate equities) and subsequently create a wealth effect to spur spending.

The sudden collapse of many key market actors in 2007, as the scale and extent of exposure to bad debt became clear, resulted in a worldwide seizing up of credit. This in turn made banks unwilling or unable to make loans to businesses, forcing governments to turn to massive intervention via quantitative easing to return liquidity to markets.

After Augustus’ death, the Emperor Tiberius hoarded money, with the result that interest rates rose above the legal limit and a banking crisis erupted in AD 33. Tiberius then decided to lend out the imperial treasure free of interest to patrician families, which brought about an immediate decline in interest rates and an end to the crisis.55 His actions constituted the world’s first experience of quantitative easing.fn9

What are the policies that will bring back growth? Repealing Obamacare. Reining in abusive regulations. Stopping the EPA from strangling the American energy renaissance that can create millions of high-paying jobs, in energy and in heavy manufacturing. Sound money, auditing the Federal Reserve and stopping its endless quantitative easing that is debasing our currency and making daily life more expensive for hardworking Americans.

The ECB in June became the first of the world’s main central banks to push a key policy rate below zero. But after Thursday’s cuts Mr Draghi said he saw no scope for further reductions. While yields on shorter-dated bond yields typically held by banks have fallen, the impact of the ECB’s latest measures on longer-term debt is less certain. Yields on benchmark 10-year bonds should rise if the ECB succeeds in raising expectations about future growth and inflation rates. However, speculation that the ECB could still launch a full-blown “quantitative easing” programme and buy government bonds would have the opposite effect. Analysts said even the asset purchase programme announced on Thursday could have QE-type effects.

Mr Draghi’s comments have increased the chance of outright quantitative easing as the next step for ECB policy,” said Michael Gapen, an economist at Barclays. “However, we believe the bar for outright QE remains high and is contingent on deflation and governments’ willingness to co-operate – the ECB does not want QE to be a substitute for government action, especially on structural reforms.

left school without knowing what capitalism was, much less a mortgage, interest rates, central banking, fiat currency or quantitative easing. The word imperialism had never been used in the classroom, much less ‘class struggle’. What history I did learn can be seen as little more than aristocratic nationalist propaganda; Henry VIII and his marital dramas; how Britain and America defeated the Nazis – minus the Commonwealth and with a very vague mention of the Soviet contribution; how Britain had basically invented democracy and all that was good and wonderful.

macroeconomics was no longer so very clear on the ultimate effects of quantitative easing, given that the evidence from the past half century could be interpreted either way. That this debate was a clear sign that macroeconomics as a field was ideological to the point of astrology was often asserted by people in all the other social sciences, but economists were still very skilled at ignoring outside criticisms of their field, and now they forged on contradicting themselves as confidently as ever.

Since inflation results from economic strength, the efforts of central bankers to control it amount to trying to take some of the steam out of the economy. They can include reducing the money supply, raising interest rates and selling securities. When the private sector purchases securities from the central bank, money is taken out of circulation; this tends to reduce the demand for goods and thus discourages inflation. Central bankers who are strongly dedicated to keeping inflation under control are called “hawks.” They tend to do the things listed above sooner and to a greater extent. The problem, of course, is that actions of this kind are anti-stimulative. They can accomplish the goal of keeping inflation under control, but they also restrain the growth of the economy, with effects that can be less than beneficial. The issue is complicated by the fact that in the last few decades, many central banks have been given a second responsibility. In addition to controlling inflation, they are expected to support employment, and, of course, employment does better when the economy is stronger. So central banks encourage this through stimulative actions such as increasing the money supply, decreasing interest rates, and injecting liquidity into the economy by buying securities—as in the recent program of “quantitative easing.” Central bankers who focus strongly on encouraging employment and lean toward these actions are called “doves.

Every time the politicians we elect attempt to increase our standard of living or employment prospects by increasing government spending to stimulate economic activity (‘Keynesian economics’ as it is called); and every time a national bank tries to increase our standard of living or employment prospects by stimulating economic activity by increasing the money supply (‘quantitative easing’ as it is called), each of those actions has its ideological origins in the ideas contained in John Law’s Money and Trade Considered, and the actions of John Law’s Mississippi Scheme.