{"id":398809,"date":"2019-03-10T01:13:39","date_gmt":"2019-03-10T00:13:39","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/a-modest-proposal-for-the-fed\/"},"modified":"2019-03-10T01:13:39","modified_gmt":"2019-03-10T00:13:39","slug":"a-modest-proposal-for-the-fed","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/a-modest-proposal-for-the-fed\/","title":{"rendered":"A Modest Proposal for the Fed"},"content":{"rendered":"
\n

Quantitative easing, the program of asset buying initiated\u00a0by the US Federal Reserve Bank\u00a0in 2008, represents the most profound monetary experiment in the history of the world. Between fall of 2008 and fall of 2014, three successive rounds of QE quadrupled\u00a0the monetary base of\u00a0the world\u2019s most-used and dominant currency,\u00a0from from less than $1 trillion to more than\u00a0$4 trillion. The Fed literally created new money, bought Treasury debt and mortgage-backed debt (of dubious character) from commercial banks, and credited them with new reserves.<\/p>\n

\"\"<\/a><\/p>\n

It was a great trick.\u00a0If QE can be done without adverse effects or with few adverse effects, it represents nothing short of monetary alchemy (h\/t\u00a0Nomi Prins<\/a>). Everything we thought we knew about the Fed\u00a0as backstop lender\u00a0of last resort\u00a0to commercial banks, as hallway\u00a0monitor\u00a0of inflation and unemployment, is out the window.<\/p>\n

If QE works, then every government\u00a0on earth must take notice of the opportunity\u00a0to effectively recapitalize their own banks and industries free of charge. QE turns central banks into kings\u00a0of capital markets, into\u00a0active participants in the economy. As one\u00a0twitterati\u00a0put it,<\/a>\u00a0expansionary QE\u00a0created the biggest untold American story of the last twenty years: the Fed can\u00a0now\u00a0inflate and deflate assets, devalue savings, influence\u00a0wages and productivity, encourage corporate malfeasance, and engineer balance sheets\u2014all the while creating economic\u00a0winners and losers.<\/p>\n

What politician or central banker could resist?
\n\"\"<\/a><\/span><\/span>
\nThe Great Deformation:…<\/a><\/span><\/span>
\nDavid Stockman<\/span>
\nCheck Amazon for Pricing.<\/span><\/span>
\n<\/a><\/span>
\n<\/span><\/p>\n

Recall how defenders of QE not only argued it was necessary, but\u00a0beneficial.\u00a0<\/em>Paul\u00a0Krugman\u00a0was among the worst offenders, insisting that low interest rates would mitigate any harms from such rapid monetary…<\/p>\n<\/div>\n

Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Quantitative easing, the program of asset buying initiated\u00a0by the US Federal Reserve Bank\u00a0in 2008, represents the most profound monetary experiment in the history of the world. Between fall of 2008 and fall of 2014, three successive rounds of QE quadrupled\u00a0the monetary base of\u00a0the world\u2019s most-used and dominant currency,\u00a0from from less than $1 trillion to more […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519],"tags":[],"class_list":{"0":"post-398809","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-newswire"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/398809","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=398809"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/398809\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=398809"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=398809"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=398809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}