Quote from Cullen Roche on 02/16/2021, 9:13 AM

Eh, I don't know...he seems to have a decent grasp on things, but I see some imperfect descriptions. For instance, QE does create more money in that it can create deposits when it is enacted with a non-bank. This money isn't "trapped" in the banking system at all like QE does when it is enacted with a bank.

I also don't love the idea of the velocity of money. This is just a tautology that must mathematically be derived from MV=PY.

 

 

Quote from hugo on 03/01/2021, 1:09 PM

Hi @cullen-roche, what is an example of your description "...QE does create more money in that it can create deposits when it is enacted with a non-bank", in particular, what is a non-bank?

Quote from Cullen Roche on 03/02/2021, 10:56 AM

Hi @hugo,

For instance, if I sell my bonds to a bank and the bank sells the bonds to the Fed then the bank credits me with a new deposit. I have swapped my bond for a deposit.

This paper covers the details:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2397992

Hope that helps.