Australia Considering Money Printing

[Economy 52,837]

https://www.google.ca/amp/s/www.lifehacker.com.au/2019/11/what-is-quantitative-easing-rba-print-money-australia/amp

 

The Central Bank of Australia is considering further monetary policy loosening to further stimulate its stagnant economy after rates cuts all the way down to 0.75% failed to produce the desired effect. 

 

Now it is considering Quantitative Easing (money printing to buy up assets such as bonds to further lower yields and market interest rates)

 

Japan was the first Country to do this but since then other parts of the developed World like the US and the European Union have done the same

[A Hybrid 11,049]

At this point idk if you’re named after the tag or the tag’s named after you

[Economy 52,837]

4 minutes ago, A Hybrid said:

At this point idk if you’re named after the tag or the tag’s named after you

I even used to have my own pinned daily econony thread for like 2-3 years

 

however due to low traffic the pin was eventually taken down

[Conservative Mom 655]

i like your posts hunny

[PartySick 172,392]

44 minutes ago, Economy said:

I even used to have my own pinned daily econony thread for like 2-3 years

 

however due to low traffic the pin was eventually taken down

It's nicer for you to be able to make a new thread about all these topics anyway

So speak to the economically illiterate hunty, this won't cause inflation?

[Economy 52,837]

1 hour ago, PartySick said:

It's nicer for you to be able to make a new thread about all these topics anyway

So speak to the economically illiterate hunty, this won't cause inflation?

Yes it causes inflation because it expands money supply. Also the asset price inflation and lower interest rates that bond and asset purchases cause create inflationary pressure as well

 

But. QE is used as an extreme measure during low inflation stagnation as has been the case in Japan, EU right now and when the US did it after 2008 financial crisis so in these cases a little inflation is ok

 

the cool thing about QE tho is that any money that the Central Bank prints to purchase stocks and bonds, when it sells them again they have the option of destroying the currency back into nothing in the proccess

 

so if inflation picks up later they can remove that created money back out of existance which you wouldnt be able to do if the money was printed and simply given to the Government to spend

 

Nevaertheless Quantitative Easing does have possible negative side effects hence why its used as a last resort and why it has so many critics