Bluntly: QE Doesn’t Work

QE End

Why does this surprise anyone?

Hours after the leaders of the world’s 20 most developed economies sought to boost confidence by promising to increase global output by $2 trillion over five years, Japan said it had fallen into recession.

That leaves the country — the world’s third-largest economy — on a long and growing list of troubled economies. China is slowing as well, and Europe can’t seem to take off.

Among major economies, only the United States and Britain are growing at decent rates, and how long that lasts depends on how much trouble their trading partners are in.

No we’re not.

You must subtract the amount of “QE” in percentage terms of the economy from the nominal growth rate.  This is basic algebra; you must remove the same term from both sides when you solve an equation; you cannot add (or remove) it from only one side.

Yet that’s the fraud that exists when you state “GDP” without removing all deficit financing and monetary emission from the figures!

It is, in fact, the predicate of this series:

Growth?  What growth?

And yes, credit emission is not limited to central banks or governments — in point of fact they’re not the largest source of the problem in that they step in only when private banks can’t or won’t!

Everyone wants to scream “END THE FED!” but in fact if you ended the Fed you’d do nothing for two reasons:

  • The Fed is not the largest source of the problem; that is (by a huge margin) found in the private banking cartel.
  • The Fed can only buy US Government securities.  Therefore, if there is no deficit there is no Fed buying activity.

It’s that simple folks when you boil it all down.  The Fed can want to engage in QE but if there are no government bonds to buy then it is unable to do so.  Without continued new emission of more and more bonds (that is, more and more deficit spending) The Fed is unable to perform “QE”; it is not mathematically possible given the boundaries they are forced to operate under.

The reason that such attempts cannot work is that the smaller is never able to upstage the greater.  That is, a minority position is never larger than the whole.  By definition it is impossible for The Fed or any other Central Bank to violate this precept; it is simple arithmetic.

So why do it?

That’s easy: It’s far easier to steal, and you’re less likely to get shot doing it, if you steal by subterfuge than engaging in your theft through a straight-up “in your face” assault.

But it is The Federal Government and their cronies, not The Fed itself, that is doing the stealing.

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