http://revolutionradio.org/?p=11231 Your Weapon of Mass Destruction Tue, 18 Jun 2013 17:01:06 +0000 hourly 1 http://wordpress.org/?v=3.0 http://revolutionradio.org/?p=11231&cpage=1#comment-20391 Lorne Marr Wed, 26 Jan 2011 16:42:49 +0000 http://revolutionradio.org/?p=11231#comment-20391 Technically, you're right, but the point of QE2 is something else. Only a small portion of the real money printed is intended to enter the real economy. The FED would like the money to never enter the economy, but it will eventually, in that you're right. But not all of it, because most of it will be tied in financial institutions which won't borrow so easily, if they have self-preserving motives. The real desired impact of QE2 is to lower interest rates, and therefore motivate banks to give credit (which they probably won't as much) and more importantly to lower interest on adjustable rate mortgages, so people will default less and have more money to spend on other thinks than financing their credit. Technically, you’re right, but the point of QE2 is something else. Only a small portion of the real money printed is intended to enter the real economy. The FED would like the money to never enter the economy, but it will eventually, in that you’re right. But not all of it, because most of it will be tied in financial institutions which won’t borrow so easily, if they have self-preserving motives. The real desired impact of QE2 is to lower interest rates, and therefore motivate banks to give credit (which they probably won’t as much) and more importantly to lower interest on adjustable rate mortgages, so people will default less and have more money to spend on other thinks than financing their credit.

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