Josh-Daniel S. Davis (joshdavis) wrote,
Josh-Daniel S. Davis

quantitative easing

Wow. In research, it seems that fiat currency managed by a central bank, aka the us dollar and others, is effectively a share in the assets held by that bank, namely government bonds, and other valuables and securities.

Quantitative Easing is effectively an issuance of additional shares, without adding to the underlying portfolio. It thins the value of the currency; however, it increases liquidity which can then be used as a inject into private banks thru loan and purch of securities which may also be more issues thinning those values. This reduces the value of all existing money and debts, and seems to me that it would lead to inflation, tied first to anything which has a cost tied to value rather than tied to other costs. Ie, foreign trade would be affected first, increasing cost of non-local goods.

I bring thus up because it seems that many world gov'ts (canada, switzerland, uk, us, jpy, more?) are doing or planning this. We are all agreeing to inflate together, knowing that we depreciate our values as opposed to the less affected or later affected currencies.

This will be good for japan who has been doing this for a decade, and bad for many world powers.

I do not know how info tech will play out in this. I imagine it will inflate in cost relative to the percentage of inflation since it's sort of a glue piece. I hope so. Much of what I work and play with involves products made overseas and so for me, the goal is to incr my income in lockstep with the increase of cost to electronic goods.

Can we say 10 % inflation in the next 13 months?
Tags: government, mobile, money
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