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Monetary Easing:
Trendy, But Dangerous Business




The United States, Japan, the EU's ECB and the UK's Bank of England are all turning to artificial stimulus in order to keep their economies from crashing.

Simply said - monetary easing is referred to as "money-printing", but it generally happens as electronically (currency creation by computers). National banks create money digitally in order to be able to pay off their debt.

Monetary easing is used to buy the bonds and treasuries by artificially-created US dollars (by the Federal Reserve). Japan, the EU and the UK are undertaking similar measures.

The money created has no backing whatsoever and it's obvious that the "easing frenzy" will lead to the currency's dilution, otherwise said: inflation.

Artificially-generated US dollars are helping the United States pay-off their mounting debt, because a bubble is being inflated. The money-created is never enough (and never will be), therefore more and more will have to be created. It's a debt spiral like borrowing money to pay off borrowed debt. Debt upon debt cannot save the US economy.

The EU is bailing out banks and creating euros "out of thin air" in order to keep its major banks from collapsing.

Japan on the other hand, has been struggling with deflation, so they resorted to money-printing too, but only in order to create a "slight inflation", because it's needed for the economy (especially because they rely so heavily on exports).

All the monetary easing is only good for keeping the economies working for a while. But only for a while, because money-printing only helps save time, while inflating a bigger bubble - increasing the debt. Therefore, it's counterproductive.





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