Great Explanation of QE2

Here’s the best explanation I’ve seen on Quantitative Easing from Steven Landsburg.   I recommend reading the whole post, but if you are curious about what exactly QE is, here it is in a nutshell:

They’re creating 600 billion new dollars and using those dollars to pay down the government’s debt.

The rest of Landsburg’s post does a great job of explaining potential results of this action.

If I understand it correctly, the net effect will likely be the transfer of wealth from those who are holding to dollars to the folks who sold their bonds back to the government.

Thanks to Steven Landsburg for taking the time to explain this.

Comments

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s