Changes

'''Quantitative Easing''' is the controversial use of gimmicks by the [[Federal Reserve]] to try to encourage [[economic growth]] during a [[recession]].  It consists of buying up longer-term [[bonds]] in an indirect effort to lower medium and long-term [[interest rates]]. So, the Federal Reserve shifts its portfolio of [[asset]]s from overnight and short term [[loans]] to holding more long-term bonds.

'''Quantitative Easing''' is the controversial use of gimmicks by the [[Federal Reserve]] to try to encourage [[economic growth]] during a [[recession]].  It consists of buying up longer-term [[bond]]s in an indirect effort to lower medium and long-term [[interest rates]]. So, the Federal Reserve shifts its portfolio of [[asset]]s from overnight and short term [[loans]] to holding more long-term bonds.

It is an economic [[monetary policy]] in which the total [[money supply]] is increased by the [[Federal Reserve]] buying government [[Treasury bond]]s. The goal is to encourage private [[bank]] to lend more and help reduce the effects of an economic recession. Quantitative easing was first used by [[Japan]] in 2000 to fight a [[deflationary]] economy. The 2010 and 2011 actions of Federal Reserve Chairman [[Ben Bernanke]] is to buy U.S. [[government bond]]s, with [[national debt|borrowed money]], to help ease America's declining financial statistics. By creating more dollars out of thin air, the dollar becomes devalued with the existing money supply versus other [[currencies]]. This policy of creating additional money to give to banks so that they lend more is highly questionable. The banks were largely responsible for the [[Great Recession]] and the increased money for banks have failed to produce the desired effect even after the [[Central Bank]]'s $1.7 trillion purchase. The short term gains are minimal and in the long term, this will eventually lead to higher prices and inflation or even hyper-inflation.<ref>[http://blogs.forbes.com/charleskadlec/2011/02/22/higher-inflation-is-on-the-way/ Higher [[Inflation]] Is On The Way, [[Forbes]].com, February 22, 2011]</ref>

It is an economic [[monetary policy]] in which the total [[money supply]] is increased by the [[Federal Reserve]] buying government [[Treasury bond]]s. The goal is to encourage private [[bank]] to lend more and help reduce the effects of an economic recession. Quantitative easing was first used by [[Japan]] in 2000 to fight a [[deflationary]] economy. The 2010 and 2011 actions of Federal Reserve Chairman [[Ben Bernanke]] is to buy U.S. [[government bond]]s, with [[national debt|borrowed money]], to help ease America's declining financial statistics. By creating more dollars out of thin air, the dollar becomes devalued with the existing money supply versus other [[currencies]]. This policy of creating additional money to give to banks so that they lend more is highly questionable. The banks were largely responsible for the [[Great Recession]] and the increased money for banks have failed to produce the desired effect even after the [[Central Bank]]'s $1.7 trillion purchase. The short term gains are minimal and in the long term, this will eventually lead to higher prices and inflation or even hyper-inflation.<ref>[http://blogs.forbes.com/charleskadlec/2011/02/22/higher-inflation-is-on-the-way/ Higher [[Inflation]] Is On The Way, [[Forbes]].com, February 22, 2011]</ref>

[[Category:Economics]]

[[Category:Economics]]