is qe printing money?

Skol,

I think your comment that QE does not add to the money supply needs to be answered.

You wrote:
'It's a fallacy that the Fed is printing money.
QE does not add to additional money in circulation.'

I'm not sure if you understand what happens with the so called QE. Basically the fed will be crediting the accounts of the various primary dealers (Goldman Sachs, JP Morgan, HSBC etc) with newly created money in their accounts that they keep at the new york fed. This is a direct expansion of the M0 money supply. M0 includes all currency plus deposits held at the fed.

So although QE may not directly or immediately effect the M3 supply, it is adding directly, and in huge amounts this time around, to the base and most tightly defined money supply.

If this recovery that you keep going on about actually happens then those newly created M0 dollars will be loaned out by a factor of ten, thanks to the fractional reserve banking system, and will lead to an enormous increase the M2 and M3 numbers causing inflation even the government will struggle to ignore.

The ironic thing is that this latest round of money printing has failed to have the effect the fed wanted because it is not driving down prices of 10 year bonds. If it doesn't work soon we may soon see QE3.