I have heard all that before, you are just repeating the mythology. You don't provide a single reason for your claim that the central bankers know what they are doing, or that it can't cause inflation.
:roll:
I already explained one major reason why QE did not, in fact, cause anything even
resembling hyperinflation. Here are a few more!
• Central bankers are trained economists, who spend considerable amounts of time studying and gaining experience in their field. That includes studying past events, such as how Ben Bernanke was an expert on the Great Depression, and why monetary and other policies of that era made the Great Depression worse.
• Central bankers, especially at the Fed, have access to all sorts of data you and I do not (and are certainly watching public data much more routinely than the average person). They are constantly watching for the effects their policies have on measures like inflation.
• Central bankers, especially at the Fed, have specific inflation targets. Something like QE is not going to set off a chain reaction, that's just not how it works. If they believe that QE is causing inflation to rise past the targets, then they scale back or stop it.
• You only get inflation when the "printed" money goes into the real economy. E.g. if the Fed generated $2 trillion and the federal government used all of it to purchase goods and services,
then you would see inflation. That's what Zimbabwe did. That's
not what the Fed did after 2008, and it's not what they are doing now.
Do you even understand what QE is?
And, by the way, the Fed kept interest rates low since 2008, regardless of how the economy was doing. Trump has no control over them.
Get real. Trump was hammering on the Fed to lower interest rates, even threatening to fire Powell. Powell wasn't taking direct orders, but he should have spent the past two years very gradually inching up rates, and it's pretty clear why that didn't happen.
Trump also appoints people to the Fed, including the chair. One of his recent picks, Judy Shelton, is a wacko who believes in the gold standard, who spent years parroting your "hyperinflation" claims -- but once Trump wanted lower interest rates, so did she. Hmmmmm
I understand that 2008 was serious and could have led to a depression. I understand that low interest rates and QE were supposedly the remedy.
HOWEVER, lots of experts think the Fed's interventions set us up for worse problems the next time there is a crisis. Like, for example, now.
Hello? Did you not read my post? Yeesh.
You have blind faith in experts, but you don't realize that they don't all agree with each other.
:roll:
This is not a matter of "blind faith," it's a result of actually understanding how monetary policy works. And pretty much no reputable economists believe that QE will cause hyperinflation. The only people who believe that are cranks and gold bugs.
I might add that yes, even the experts can screw up. One key example is Alan Greenspan, who adopted a
laissez faire attitude, and actively fought against regulation of the derivatives and mortgage markets. Even he realized that his faith in free markets was a mistake.
QE didn't cause extreme inflation because most of the money hasn't gone into circulation. Why not? And what if it does?
LOL
Again, as I pointed out, one key factor is that there were already deflationary pressures.
It didn't go into circulation, because it stayed on the books at commercial banks as reserves. The money gradually goes back to the Fed as interest payments on the bonds that were purchased. You clearly don't understand how QE works.
There are plenty of questions we should be asking. But, like most people, you would rather trust the experts because trying to understand is too much trouble. And THAT is why they can do whatever they want.
No, it's that some of us actually know what we're talking about, before we say it.
