An actual economist talks about Ritchie’s permanent QE

Thus QE is only compatible with very low inflation if the public believes there is only an infinitesimal chance that the QE is permanent. Because the actual QE has not resulted in high inflation, we know that the public has a very high level of confidence that the QE is not permanent (or that if permanent, interest will be paid on the excess reserves.)

2 thoughts on “An actual economist talks about Ritchie’s permanent QE”

  1. Cantillon Effect.

    If you create more money in a corrupt environment like this, the rich will get it first and spend it on steak.

    Thus pointing out that the price of mince has not risen is looking for price inflation in the wrong place.

    Indeed if staff at the steak house who get the new money last are carrying too much debt, the new money won’t even cause the price of mince to rise – it will just destroy debt.

    People like Paul Krugman who point out that mince is still cheap are either clueless or they have an agenda.

    And Paul Krugman and his Neo-Keynesian acolytes eat a LOT of steak.

    In short, the price inflation is seen in equities, art, diamonds, real estate, land – the stuff rich people buy.

    Arguably, the collapse in velocity has delayed hyperstagflation.

    But it’s coming, and that right soon.

  2. Ivor

    Is that last statement a nod to the Shawshank Redemption?

    ‘His judgement cometh, and that right soon’

    I wonder if Ritchie will take the way out of Samuel Nordin when the reckoning comes – to quote Bill Clinton:

    ‘I believe in a place called Hope’

    Absolutely spot on – the advocates of Permanent QE (of whatever stricture) are utterly clueless….

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