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Health & Fitness

Quantitative Easing to Hide the 'Nasty'

It seems like some economic practices are only meant to hurt us — and, unfortunately, it's likely not enough people are listening.

I heard a good one on NPR. There is a term, "quantitative easing," being bandied about.

I am no economist and the practice of QE is not simple, but I had the sense when I heard about this that someone was screwing us. Like the terms, "regime change," and "pre-emptive strike," I got the sense that someone was bending the language to cover something particularly nasty.

Wikipedia includes re: QE, that "A central bank buys financial assests to inject a pre-determined quantity of money into the economy." They do this by purchasing financial assets from banks and other private sector businesses with new electronically created money. 

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The point is to help ensure inflation "does not fall below target."

OK. Hold on. First of all, someone is buying financial assets with electronically created money, thereby injecting money into the economy with the aim of making sure inflation is not too low! That is some sort of hocus pocus, for sure! I would like to know how you electronically create money! It sounds illegal, doesn't it?

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Secondly, some economist guided adminsistration dude somewhere (the Fed, Wall Street, the Oval Office ... or where?) decides for all of us that inflation is too low and adjusts if for us. Thanks!

The risk is that the gradual easing is too effective and inflation snaps our heads off! 

The guy on NPR said, when you increase inflation, people think ... "Oh, that washing machine is going to cost me a lot more next year than now ... prices are supposed to go up. So they run out and buy them today." That is certifiable HS my friends. I don't think the middle class is listening much to blogs by economists before they bullet point their to-buy lists. 

Part of my New Year's resolution is to talk about B.S. when I smell it. Watch out for phrases like "gradual easing."  That should be reserved for an ex-lax commercial and you can whoever is bending over is not the guy who is using the term. IMO.

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