2013-07-10wallstreetexaminer.com

QE stimulates inflation, only not the dumbed down definition of inflation encapsulated in CPI or PCE. If you dumb down inflation to exclude all the things that are inflating, then voila, there's no inflation. However, QE is directly responsible for asset inflation... Establishment economists and their supporting cast of lying shills deliberately exclude asset inflation from their definitions of inflation. So it appears that QE does not cause inflation as narrowly defined. If you believe that narrowly defined CPI is the only kind of inflation, then stop reading now. You're in denial and presentations of fact and logic won't change that.

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As Treasury supply diminishes the recipients of the QE seek other ways to employ the funds. That results in an increase in the prices of other financial assets, whether bonds, equities, or futures. This works every time without fail. When the Fed prints money, asset prices inflate, and if Treasury supply is restricted other asset prices inflate more. This is basic supply and demand.



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