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Will Quantitative Tightening Lead To Even Greater Financial Losses?
Money For the Rest of Us
Quantitative Easing - What Is It?
Quantitative easing (c e) consists of central banks purchasing government bonds or other securities in the secondary market. Ce on its own doesn't create wealth, and i've discussed this in the past. But when a central bank pursues quantitative easing at the same time the federal government is running a budget ia, then that c e programme leads to money creation. It's possible to be wealthy, but cash poor. We could have a lot of wealth in our house, but not have any cash to spend. For an economy to expand dramatically, for individuals to buy more output, causing businesses to want to produce more output, economies need more liquidity.
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