A PeakProsperity.com reader recently lamented:
I have been trying to get my head around the mechanism of QE. Not being an economist or experienced investor, I don’t really understand a lot of the jargon. The usual simple definition of QE as “thin air money printing” does not satisfy my need for understanding either. Have hunted for a description of QE for dummies that leaves me feeling like I get it, but with no luck. My difficulty is in understanding how thin air money gets into circulation.
So I’m going to do my best to answer this plea in as intuitive and straightforward a manner as I can. I, too, share the need to understand the mechanism of a process in order to feel like I have a grasp of it. And I think it’s critically important to understand QE (also known by its full name, “quantitative easing”) and what it really represents. Because it is, without a doubt, one of the largest market-shaping forces of our times.
Further, it presents extraordinary risks and may well turn out to be a decisive shaping process for the future, as well. And not in a good way.
Despite its sophisticated-sounding name, QE is nothing more complicated than…
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