That's like asking a scientist to explain quantum physics in two minutes.
If you don't understand QE - you're not on your lonesome. In a recent survey in America:
Of the 857 people surveyed 73 percent were unable to pick out the correct definition of Quantitative Easing.
Most of what is written about quantitative easing is distorted by ideology (e.g., it leads to hyper-inflation) and rhetoric (e.g., it's an outlandish experiment). It's also a source of much misinformation. The most common one being an overly simplistic view of what constitutes "money supply".
When reading about QE on internet sites, be very wary of
1. statements which appear to be factual but which are ideological.
2. statements which try to persaude through rhetorical devices rather than economic argument.
3. overly simplistic representations of complex economic concepts.
When QE is written about it is invariably written about in isolation. QE is ........ etc. ..... without looking at the whole economic landscape.
Some one taking a broader view recently, for example, is Anatole Keletsky. He suggests that people should be much more concerned about what governments are doing with fiscal policy than what Central Banks have been doing about QE.
His article is at Reuters and up-to-date (31 October, 2014):
He doesn't mention Australia - but if you extrapolate his views to our country, I'd be very worried about what the Australian government is doing with the budget.
If you think that's a statement biassed by my political views it is not.
If you want to understand economics (of which QE is just a part) then I would suggest you start reading on a regular basis:
It is often said that generals fight the last war that they have won, even when those tactics are no longer appropriate to the war they are fighting today. The same point has been made about macroeconomic policy: policymakers cannot avoid thinking about the dangers of rising inflation, and in doing so they handicap efforts to fully recover from the Great Recession.
If you really want to understand QE - and the economic landscape in which it is embedded - there's no easy way of doing that. A lot of study is required.
There are plenty of armchair economists out there who will repeat ideological views on QE they've read on the internet, or espouse the rhetoric used by others, or who simply don't understand some complex economic concepts. After 5 minutes or 10 minutes or 15 minutes of reading stuff on the internet on QE - they become instant experts. I read such views every day on hotcopper. It's not that easy.
(20min delay)