Wednesday, July 07, 2010

Its the QE2!!

Once again, we hear rumblings about the next possible round of Quantitative Easing, and once again, I will remind everyone that such an operation is a simple asset swap between interest bearing instruments and will not achieve the desired effect.

In the Falkland Island conflict, the QE2 was used as a troop transport, that is, it as used as an ancillary frigate in order to bring real forces to bear. Quantitative Easing is similar in the respect it needs other measures to have any hope of being effective.

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