New Home Owners And Snagging Forum
Investments => Financial Markets and the economy => Topic started by: Denny Crane on September 19, 2012, 07:43:10 am
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Government prints money to buy back its bonds.
The result is prices rise as the country's currency is devalued.
In the US the first round of QE resulted in a 20% increase in food prices and a 59% increase in oil.
After QE2, food went up a further 15% and oil another 30%.
The general economy is not helped or boosted as a result of QE because essential consumer prices increase.
In fact, every $10 increase in the price of oil takes 0.3% off GDP.