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On November 4, on Bloomberg TV, David Stockman, Reagan's Office of Management and Budget Director, explained it this way:
Fed QE "is injecting high grade monetary heroin into the financial system of the world, and one of these days it is going to kill the patient," meaning economies and people.
In early 2009, economist Michael Hudson said:
"The (US) economy has reached its debt limit and is entering its insolvency phase. We are not in a cycle but (at) the end of an era. The old world of debt pyramiding to a fraudulent degree cannot be restored," only delayed to postpone a painful day of reckoning.
Piling new debt on old exacerbates a bad situation. Hudson explained more in his latest article titled, "US 'Quantitative Easing' is Fracturing the Global Economy."
Quantitative Easing (QE) Defined
In simple terms, it's monetary policy to increase the money supply - literally creating it out of thin air. Wikipedia calls it central bank policy "to increase the supply of money by increasing excess reserves of the banking system. This policy is usually invoked when the normal methods to control the money supply have failed." Or have been exhausted in cases where interest rates are near zero, today's situation in America, Japan and elsewhere.
Central banks do it electronically, thereby increasing their own accounts to use any way they wish, but not risk free. Though not evident so far, too much money chasing too few goods causes inflation. Currency debasing, including the dollar, is another issue, very relevant today, given that it's part of the Fed's plan. Gold prices reflect it, rising from under $300 in 2002 to nearly $1,400 currently, experts believing it's heading much higher. Bond rates so far are low, reflecting economic weakness, but once inflation is sensed, they'll rise proportionately to the risk.
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