Does anyone have a solid understanding of how QE affects the economy? From what I've read, QE basically stays locked in the financial system as interbank cash. I think this can affect short term interest rates, and therefore affect lending(and money creation by the big banks), but otherwise that money doesn't really drive inflation, at least not directly.
Based on that assumption, the real driver of inflation is the $5.4T in stimulus combined with supply-side shortages.
It's looking to me like inflation is here to stay. On-shoring, demographics(aging boomers), the end of cheap energy and many materials, and other factors seem to be putting the US on a different course than we've been on for ~100 years.
It did spike up inflation when it was introduced and once inflation starts its effects tend to spiral.
Look, we're also coming from years of QE. We've been screwed for years, it's just a matter of understanding when the government won't be able to support this monster they created and let th market correct itself. Instead of a series of small economic crises we'll get a massive one.
Most of our economic crises are caused by governments interfering with the market.
Did it come and "go", though? A lot of that money was earmarked for local and state government programs, and at least from what I'm seeing, a lot of those projects haven't even taken place yet. Our local city hall, for example, is still trying to spend some of the money, which they will be reimbursed for after the projects are complete.
Does anyone have a solid understanding of how QE affects the economy? From what I've read, QE basically stays locked in the financial system as interbank cash. I think this can affect short term interest rates, and therefore affect lending(and money creation by the big banks), but otherwise that money doesn't really drive inflation, at least not directly.
Based on that assumption, the real driver of inflation is the $5.4T in stimulus combined with supply-side shortages.
It's looking to me like inflation is here to stay. On-shoring, demographics(aging boomers), the end of cheap energy and many materials, and other factors seem to be putting the US on a different course than we've been on for ~100 years.