Quote:
Originally Posted by The Demon
When you keep pumping money into the economy via quantitative easing, this is the result. Well actually the result is eventual inflation and hyperinflation. Ironic, because Bernanke thinks QE WON'T allow inflation. The guy is such a moron he needs to be fired and FAST. Also, get rid of Geithner and the other mainstream economists.
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That's not quite right. Bernanke WANTS the QE to create inflation because there are signs of deflation. You know, prices go down so people wait to buy, which in turn means less money changing hands and then you have deflation. Deflation is far more difficult to stop than inflation.
If you pump out lots of money and keep the interest rate low you create inflation. And since money becomes worth less due to the inflation, people will spend it. Thus, you kickstart the economy. When the economy starts to go wild you "simply" increase interest rates again and you stabilize the economy.
Or so the theory goes
