"all this QE nobody really bloody knows...inflation, deflation, stagflation....I guess we will all find out soon enough....."
QE is almost seven years old. I think that we already know what it does and doesn't do:
- Helps keep the Fed Fund Rate near zero
- Helps keep term interest rates low
- Causes a build up of the Fed balance sheet
- Causes a build up of commercial bank reserves
- Doesn't cause M2 to grow
- Doesn't cause inflation
- Doesn't have a measurable impact on the price of gold
