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#1 2011-01-02 17:08:54

primaticves
Member
From: Australia
Registered: 2010-12-04
Posts: 18
Trades :   

Where does all the QE money go to??

Hey guys just a  question I wanted to ask, where does all the QE money go to or should I ask who does it go to?? to my understanding it is suppose to stimulate the economy and encourage consumers to spend. What I dont understand is how and who do they pick for the money to go to?? thanks!

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#2 2011-01-02 17:17:44

chimpanchu
Member++
From: Australia
Registered: 2009-08-07
Posts: 1,653
Trades :   

Re: Where does all the QE money go to??

primaticves wrote:

Hey guys just a  question I wanted to ask, where does all the QE money go to or should I ask who does it go to?? to my understanding it is suppose to stimulate the economy and encourage consumers to spend. What I dont understand is how and who do they pick for the money to go to?? thanks!

The money went to big banks, hedge funds, and other financial institutions both within USA and foreign. The recipients can decide what they gonna do with the free cash.


"The world needs to grow up and realize that governments are not the measure of legitimacy.
Legitimacy comes from adherence to ethical principles, not from politics.
2500 years of economic history show clearly that political power corrupts.
All governments without exception, lie, cheat, and steal, and always have."
   -- Richard Maybury

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#3 2011-01-02 17:29:06

Slam
Silver Stacker
From: Australia
Registered: 2010-09-27
Posts: 1,254

Re: Where does all the QE money go to??

QE was used to buy up toxic debt, treasury notes and treasury bonds.

So basically it is like an asset swap where the FED prints money and buys up the worthless assets that no one else wants. This is suppose to keep the banks afloat and the whole economy running. The problem is its not going to stimulate main street, because hardly any of the money flows back into main street. What its probably done, is that its propped up the share market and kept the music going a bit longer.

The problem right now, is that deflation occuring. The monetary system relies on the expansion of credit, if people don't borrow then there will be a contraction in the money supply. When this happens, assets will fall in price. I fear this is whats happening, the US economy is contracting and QE is not working. Which is why Helicopter Ben is looking to resign sometime late this year.

If deflation continues to happen, we will see a correction in all asset prices that have been based and propped up by credit in the past. Real Estate prices in the US are correcting and will continue to do so, since people are not taking out loans to buy property property prices will continue to fall. The economy will continue to worsen.

I now understand what BenD has been saying on these forums, so paper gold and paper silver may also correct when the depression hits the US. Australia will not be spared as we have a similar credit based monetary system.

Hope the above helps, its pretty sad these days that all I see is people buying sh1t on credit. Seriously what happened to the days of saving for things? So many people live pay cheque to pay cheque each week. Credit has done no good to humanity, all its done is left those that cant save prop up prices as they bring their purchases forward.

I hope the property market crashes hard big time, so I can buy a few shops in the City outright with real money and real savings.

Slam


By failing to prepare, you are preparing to fail.

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#4 2011-01-09 02:20:42

Dabloodymess
Member++
From: Thailand
Registered: 2010-07-07
Posts: 1,234
Trades :   30 

Re: Where does all the QE money go to??

tbh, I will feel sorry for whoever gets sent in after Bernanke.......... they face an impossible task and will be the ones lynched when it all falls apart. No one who has any brains will put themselves in that position,  some poor scapegoat will get shafted with it.


"Those who cannot remember the past are condemned to repeat it." - George Santayana
My Site

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#5 2011-01-09 09:16:02

bennybbc
Silver Stacker
From: Melbourne
Registered: 2010-05-30
Posts: 439
Trades :   13 
Website

Re: Where does all the QE money go to??

hotel 46 wrote:

the world can only use so much money,the more you print the more zeroes on the end .the value of money decreases because it has been diluted by the printing. this is how QE2panning out. bernanke doing a runner.



.

double the money supply and it's worth 1/2 as much. An easy way to pay off 1/2 the debt.

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