Talk:Quantitative easing

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New introduction

I think the use of 'thin air' is rather subjective and offers quite a biased view on what quantitative easing actually is. This should be re-written or returned to the original 'is a tool of monetary policy.' which was much more neutral. -- (A.szczep) 08:48, 20 February 2009 (UTC)[reply]

Why is it biased? And it's certainly not subjective. It's an objective description of the process. Just saying something is a 'tool' doesn't describe where the new money comes from. People ask where new money comes from? It's created out of thin air. fact. 'thin air' is a common enough phrase and it's use here is appropriate. Vexorg (talk) 21:41, 21 February 2009 (UTC)[reply]

"A central bank can do this by buying government bonds" - how ?

The above sentence appears in the main article. I would like to ask, what does the central bank use to buy these bonds? If it uses money it already has, then where is the 'quantitative easing' ? If it is creating 'new' money, what does the double entry book-keeping look like: Debit Investments, Credit Money from thin air ? This article is very important, since it refers directly to what looks like being a major plank of G20 government policy. At the moment I echo the comments below from Ashley Pomeroy. The crucial issue that everybody wants to know is 'how is new money made'? Someone who knows the nuts and bolts of central bank bookkeeping should just show the T-account entries.

Most new money is made out of thin air by [|Fractional Reserve Banking] (deposit multiplication ). The Federal Reserve booklet Modern Money Mechanics explains how this works. Vexorg (talk) 05:50, 19 February 2009 (UTC)[reply]

btw - here's a link I found to a pdf version of Modern Money Mechanics http://www.smeggys.co.uk/smeggy_info/Modern_Money_Mechanics.pdf Vexorg (talk) 02:08, 3 March 2009 (UTC)[reply]

But what is it?

I have read the article three times, the third time whilst eating some cereal. In its current form, the article does not actually say what quantitive easing is; or if it does, it is not clear. -Ashley Pomeroy (talk) 23:08, 5 December 2008 (UTC)[reply]

Ashley, what do you find unclear?

Quantitative easing is a tool of monetary policy. It effectively means that the central bank injects new money into the financial system, in order to increase the supply of money... Is this not clear enough? Janosabel (talk) 20:38, 25 January 2009 (UTC)[reply]

My Dear Ashley: "Quantitative Easing" is Newspeak for "increasing the money supply by simply 'printing' more of it, either literally or electronically; inflating the currency by fiat". Writtenright (talk) 02:23, 8 March 2009 (UTC)Writtenright[reply]

Need to define "New Money"

Someone pleas write the entry on New Money, that is, money created in addition to total quantity of notes and coins plus the current debt burden carried by individuals households and businesses. I have contributed an introductory entry before but it got "speedily deleted". Now an economic illiterate is diverting the link to Nouveau riche. -- Janosabel (talk) 23:27, 8 February 2009 (UTC)[reply]

I've rewritten the intro to get rid of the irrelevant Nouveau riche link. The central bank buys bonds by simply crediting the account of the agents account. These new deposits allow the private bank to increase it's lending, ergo increasing the money supply. The federal reserve's document Modern Money Mechanics explains it all. Ther ereally needs to be a Wikipedia article on the Modern Money Mechanics publication. Vexorg (talk) 06:03, 19 February 2009 (UTC)[reply]

On the subject of "What is it?", can anyone include an outline of the provenance of the term "Quantitative Easing". It seems to be a new term since I can't find any references to "Quantitative Easing" prior to 2009, when there is an explosion in instances. It would be helpful because, presumably, it would shed light on how the practice is distinct from historical policies of printing money or Open Market Operations.

QE in the setting of interest rates

This could be expanded: "The BOJ accomplished this by buying more government bonds than would be required to set the interest rate to zero." How does the interest rate go to zero exactly? And is this a reference to long-term interest rates ('bond yields') since short term rates are set directly by central banks themselves?

Thanks 11:17, 05 March 2009 (UTC) —Preceding unsigned comment added by 92.2.86.124 (talk)

dead link

Forum for Stable Currencies --Alex1011 (talk) 21:50, 25 January 2009 (UTC)[reply]

Link OK now-- Janosabel (talk) 22:13, 8 February 2009 (UTC)[reply]

printing money

sometimes quantitative easing is known as "printing money", although of course paper currency that is a promissory note to gold or whatever still has to be printed. Printing money currently redirects to fiat currency. i've linked fiat currency in the see also section, as that is a prerequisite for quantitative easing, but some inclusion of the phrase "printing money" might be useful.--Mongreilf (talk) 12:27, 8 March 2009 (UTC)[reply]