johnaus,imo qe means fed creates money and uses it to buy bonds...

johnaus,

imo

qe means fed creates money and uses it to buy bonds from banks (primary dealers).

Banks use this new money to buy new bonds from govt.

govt spends the money it gets from selling its bonds.

banks sell bonds to fed for a profit. use profit to pay wages and dividends to share holders.

fed creates money to buy bonds from banks.

banks use this new money to buy new bonds from govt.

Without the fed, US bond prices collapse, yields spike, interest rates spike, entire US bubble economy implodes.

qe will continue until the USD collapses imo.