Age of Easy Money

Age of Easy Money (full documentary) | FRONTLINE

At about 15-minutes they tell you precisely why QE screwed up. The "easy money" was only easy to the big banks borrowing directly from the Fed. It was so easy that those banks didn't bother channeling that money into the economy, as the public was led to believe. Instead, those banks just bought more government paper, increasing the price of those bonds while lowering further their yields.

In 2011, a big bank in the US could borrow from the Fed at 0.2% and buy 10-year bonds yielding 3%. Why bother putting any effort into helping the productive non-financial economy? Why bother taking any lending risks, to either home-owners or businesses, when you had a licence to print money doing nothing but click a few buttons? These look like small numbers, but when dealing in billions of dollars that's a lot of "easy profits" - that was the easy money.

"Inflation" is NOT a real metric; it is a construct that is calculated in different ways, affects people in different ways and is also designed to hide the difference between price inflation due to a growing economy compared to one due to monetary inflation. The "inflation" calculations have changed so much over the years that they are very difficult to compare across decades.

So-called Quantitative Easing (QE) is monetary inflation. At first, this didn't lead to price inflation because that money wasn't going to the consumer.

M0 = currency.

M1 = M0 + liquid deposits.

M2 = M1 + short-term time deposits in banks.

M3 = M2 + long-term time deposits in banks.

Look at this chart. The astronomical rise in M2 money supply from 2020 has nothing at all to do with the crisis in 2008 and everything to do with the covid plandemic and the deliberate crippling of economies around the world while giving away money so that people wouldn't starve or revolt.

What was done from 2020 made the failure of QE worse - much, much worse.

Increasing base interest rates does nothing to ease real price inflation that is caused by the deliberate destruction of supply blamed on the brittle post-plandemic infrastructure plus throwing money at unproductive people being imprisoned by authoritarian regulations based on a fakedemic of epic proportions.

This is exactly like faking the plandemic by changing the cycle numbers of the pseudo-tests to manipulate the false positives up and then down, while also reclassifying genuine diseases so that they miraculously disappeared from statistics while unfortunate sufferers died from being untreated and misdiagnosed.

Very similar manipulation of data to a largely ignorant - and frightened - public.

Indeed, that graph itself needs to be interpreted, as M2 has NOT been falling; that graph shows percentage changes, and actual M2 has only been dropping slowly in the last few months. As the US Fed no longer bothers publishing M3, it is easier to see what is really going on in a country such as the UK. Look at the 10-year chart for M3, then click on M2 and M1.

Now, all that easy money that churned through the big banks has ended up being crushed by central banks increasing interest rates at an alarming rate. So the central banks could buy back those bonds at the new lower price, which is itself a nice scam, but banks don't want to manifest those huge losses in their profit statements, hence there are accounting tricks to amortise, or spread, those losses across the life of those bonds. Unfortunately, this trick can only be effective for those banks that hold enough other reserves to ride out these "future losses".

This is very much like not closing a losing futures position by rolling over the same trade into a future month, in the vain hope that the loss will reverse at some point. If you start to accumulate such positions you may no longer have enough capital left to open new positions that may actually be profitable.

Nobody wants to take the hit - until it hits with full force.

WTFU