If Quantitative Easing Works, Why Has It Failed to Kick-Start Inflation?

Illustration by William Banzai QE Has Failed to Spark Inflation Quantitative easing (QE) was supposed to stimulate the economy and pull us out of deflation. But the third round of quantitative easing (“QE3″) in the U.S. failed to raise inflation expectations. And QE hasn’t worked in Japan, either. The Wall Street Journal noted in 2010: Nearly a decade after Japan’s central bank first experimented with the policy, the country remains mired in deflation, a general decline in wages and prices that has crippled its economy. The BOJ began doing quantitative easing in 2001. It had become clear that pushing interest rates down near zero for an extended period had failed to get the economy moving. After five years of gradually expanding its bond purchases, the bank dropped the effort in 2006. At first, it appeared the program had succeeded in stabilizing the economy and halting the slide in prices. […] Read More

Gold And What The High Priests Of Funny Money Don’t Want You To Know

Steve Forbes has had enough of the Federal Reserve and its “sinning” policies to undermine the dollar. In this brief interview with Birch Gold Group, the publisher and CEO of Forbes, Inc. exposes the damage that the central bank has created, “Bernanke was a disaster…has totally mucked up the credit markets.” Blasting Janet Yellen “who needs to go to re-education camp,” Forbes explains why he believes so strongly in the gold standard, and the one single scenario under which he would ever sell his gold.     Rachel Mills for Birch Gold Group (BGG): I am so glad to be talking with Steve Forbes, here at FreedomFest. My name is Rachel with Birch Gold Group. Can you talk a little bit about the Federal Reserve printing money these days. And the Federal Reserve recently announced that they have decided to stop printing money by October. Do you think that […] Read More

When $1.2 Trillion In Foreign ‘Hot Money’ Parked At The Fed Dissipates

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter It fits the pattern of gratuitous bank enrichment perfectly, but this time, the big beneficiaries of the Fed are foreign banks. A JPMorgan analysis, cited by the Wall Street Journal, figured that in 2014 the Fed would pay $6.74 billion in interest to the banks that park their excess cash at the Fed – half of that amount, so a cool $3.37 billion, would line the pockets of foreign banks with branches in the US. This is where part of the liquidity ends up that the Fed has been handing to Wall Street through its bond purchases. Currently, the Fed requires that banks keep a minimum balance of $80.2 billion at the Fed. Banks can keep up to $88.2 billion at the Fed as part of the “penalty-free band.” In theory, as “penalty-free” implies, there’d be a penalty on balances above $88.2 billion. But the […] Read More