Search This Blog

Google Website Translator Gadget

Wednesday, December 29, 2010

A Quick Word on Quantitative Easing (1)

Hello,

1) Recently, the Fed in the United States completed another instance of a program named, 'Quantitative Easing' (QE), does this sound familiar?

2) Something, which seems to be important to deciphering communications of the establishment, including the words of the multinational corporations with headquarters in the US and offices throughout Scandanavia and the governmental organizations with allies in Australia, is to see if their words are acting as an acceptable gloss over what may be an unacceptable deeper truth.

3) One example of the glossy governmental language is the name, Quantitative Easing.   It appears that the word, 'Quantitative' has an official, economic, professional appeal, which can garner the trust of an authority.   The word, 'Easing' can have such a comfortable, acceptable aura and for some, may reinforce the notion that the government is here to protect and improve the lives of the masses, which may be true.

4) When the Fed, thee bank, proudly proclaims to have pumped in another unfathomably large influx of currency, of Quantitative Easing, to stimulate money flow, commerce, and confidence in the market, such move, simply because of, although not limited to, the words which are labeling this move, can present the move as an acceptable gift to the economy.

5) Here is one meaning of Quantitative Easing - the bank is pumping money into the market so merchants have money to invest in inventory and have more freedom to spend, thus stimulating market flow, analogous to an injection of energy.

6) Here is another meaning of Quantitative Easing - the bank is creating money with a Federal Open Market Committee (FOMC) word or stoke of a pen, followed by a hot sheet cutting of printing presses or impressions on a keyboard, and is adding this money to the money supply.   Many people are familiar with the law of supply and demand, are they not?   Following the common law of supply and demand, whenever money supply exceeds money demand, the corresponding result is a decrease in money price or money value --- inflation.   Thus, when markets from Panama to Palestine and South Africa to Sweden, learn that the Fed in the United States has flushed more Quantitative Easing into the economy, in the form of hundreds of billions of dollars being added to the money supply, merchants can see a possible stimulation of market flow and also a vast expansion in inflation --- lowering the value of US money.

7) Considering many markets have been using the US dollar for their important transactions, for example in deals for commodities such as oil and corn, as the US dollar is dropping in value, the value of these markets' money is also dropping in value, which can have a volatile whirlwind of international influence, thus affording spirited individuals and savvy investors from Japan to Germany, to transmute international Crisis to Profit.

Thank you.

No comments:

Post a Comment

Thoughts?

Please leave a comment on Crisis to Profit.

Thank you.

What percentage of people know the Western Economy is Collapsing?