why further qe is unlikely, page-22

nice discussion

it appears to me the qe's are only replacing money destroyed by debt destruction... for the moment

so the banks 'had' say 5 trillion in money (owed to it) that it had lent out up to 2007, then suddenly people (mortgages, business, etc) cant pay; now the banks have 'lost' 5 trillion; so the govt's just give it to them

but the money did not go to the end user, say the home owner, to then pay back the bank; the home owner suddenly has no debt, and the bank ends up with the money it was owed

I guess real inflation would happen if the banks re-lent the money out to the home owner to buy another property... sort of the mulligan (take that shot again in golf) or 'do over'

So I am so intrigued if these qe's actually have increased money supply. It seems more an amazing balancing act going on.

If you listen to that clip above (hard to listen to, it is a clip that you really need to WATCH - she is gorgeous, is she not!)... if you listen, you will see at the end (just listen to the last 4 mins) Grant says the 'plan' the FEDs have to mop up this debt. I need to read and investigate more about that. But it seems to me the plan is to not have that qe'd money end up in circulation, but to remain as a transaction solely between FEDs and Banks.

So, I am indeed the believer that inflation will be here (is it already); did a lot of that money seep out?; and that will be good for gold; but I still fear a defaltionary shock if the FEDs get it all wrong... ha ha, inflation or deflation or balance... what will happen

Interestingly, I wrote before about my thinking that there are / will be two economies... public/govt that is in boom and the private which is in bust (depresssion); I guess to 'mop that' that excess money created in the public hands to make up for that last in the private hands, the FEDs hope to slowly decrese the public sector boom and fix the private sector depression slowly

Now as I type.. what chance for the public/govt sector to say 'our work is done, we can now do less, spend less, tax less, go into debt less'

Gee, my thinking says we will have eternity of ever growing phoney, public sector and depressed private sector