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angus

Quantitative easing and where did all the money go to

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Hello,

i am confused, with all of the quantitative easing, where exactly did all of the money go to? Why didn't the increased money supply cause a huge worldwide inflation yet?

will silver come to represent the currency? :)

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9 minutes ago, angus said:

Hello,

i am confused, with all of the quantitative easing, where exactly did all of the money go to? Why didn't the increased money supply cause a huge worldwide inflation yet?

will silver come to represent the currency? :)

Simply; it hasn't caused inflation because it's not sloshing around the economies of the world. it went to the banks in the main and is now locked up in asset prices, that's why the stock markets have defied gravity over the last 10 years.

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1 minute ago, sovereignsteve said:

Simply; it hasn't caused inflation because it's not sloshing around the economies of the world. it went to the banks in the main and is now locked up in asset prices, that's why the stock markets have defied gravity over the last 10 years.

hence, what you are saying is that the stock market is essentially a bubble?

so i guess we are all doing the right thing which is to stack both silver and gold

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Inflation is also in the property market - the income multiples necessary to buy a house have jumped and so many just cannot afford to get on the property ladder.

It has been admitted that QE was intended to pump up asset prices.

Government bonds have been bought up. This is how we see the utterly ridiculous negative bond yields. You buy a bond and get less money back. The ECB has been buying trillions of euros of bonds. The ECB has created over 7000€ for every person in the EU to buy up bonds.

Edited by sixgun

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5 minutes ago, sixgun said:

Inflation is also in the property market - the income multiples necessary to buy a house have jumped and so many just cannot afford to get on the property ladder.

It has been admitted that QE was intended to pump up asset prices.

thanks bro

since the 1980s, the property has already been inflated right?

singapore property prices are making me breathless. The average 1000 sq ft house is worth close to a million sgd

i really hope that my stack of silver and some gold will rally hard so that i will be able to trade it for real estate :)

 

Edited by angus
edit

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Physical gold and silver act as canaries in the coal mine for the central banks, and is an annoyance for them. Unfortunately, the federal reserve have the ability to simply create dollars on a computer screen, and use it via their ‘bad actor’ friends to suppress the price on the COMEX / LBMA. In fact, the federal reserve actually has a trading desk!!!...hence stock market bubble.

The whole system is completely rigged and will probably continue for far longer than we all hope...unfortunately.

In the meantime, the Chinese, Indian and Russian governments will continue to buy gold every month and play the long game, in the hope that one day they will have the last laugh. Fortunately, I am relatively young so might actually see this one out. I just hope the like of Eric Sprott, Bill Murphy and Chris Powell do the same.

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1 minute ago, Kookaburracollector said:

Physical gold and silver act as canaries in the coal mine for the central banks, and is an annoyance for them. Unfortunately, the federal reserve have the ability to simply create dollars on a computer screen, and use it via their ‘bad actor’ friends to suppress the price on the COMEX / LBMA. In fact, the federal reserve actually has a trading desk!!!...hence stock market bubble.

The whole system is completely rigged and will probably continue for far longer than we all hope...unfortunately.

In the meantime, the Chinese, Indian and Russian governments will continue to buy gold every month and play the long game, in the hope that one day they will have the last laugh. Fortunately, I am relatively young so might actually see this one out. I just hope the like of Eric Sprott, Bill Murphy and Chris Powell do the same.

bro whats your age? i am 33 btw

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30 minutes ago, angus said:

do you think that the monetary reset (collapse) will happen within the next 10 years ?

i fully expect this to happen within the next 10 years. Unless there is some hidden stash, the gold in the West will have run out before then. Price is not just controlled by the paper markets. Most of the market participants are happy to deal in paper as they have no interest in physical. Many who want physical can be fobbed off with ETF or unallocated accounts where they don''t have the full amount of gold or there never was any gold in their account. This is how it was being played but then enter entities who will only accept physical which they then remove from the Western system. There will come a point when there just isn't the gold to satisfy these  entities and at that point the Chinese will set the price. At the moment they are happy for the West to set a low price as they can get gold at a lower price. When the West can't supply this gold there is every advantage in  setting price much higher.

Edited by sixgun

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21 minutes ago, angus said:

do you think that the monetary reset (collapse) will happen within the next 10 years ?

I do, but in what shape or form it will take heaven only knows! 

To some extent the collapse is already occurring, those wanting to buy a house on a 3X salary multiple are dreaming. The top 1% have disproportionately benefited from the last decade at the expense of the remaining 99%...it has been done by stealth and asset price inflation way beyond what is offically reported.

Whatever happens, I am sure there will be plenty of people out there wanting to buy gold and silver...5000 years of history would suggest this is the case anyway.

In the meantime, I will enjoy life and not worry too much about what might happen. Carpe Diem!

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2 hours ago, angus said:

Hello,

i am confused, with all of the quantitative easing, where exactly did all of the money go to? Why didn't the increased money supply cause a huge worldwide inflation yet?

will silver come to represent the currency? :)

A lot of it has been held at the central banks for the private banks to gain interest on.

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In simplistic terms printing money costs next to nothing once De La Rue or whoever presses the green button.
Once the billions of new notes hit the street all that happens is the purchasing power of your currency has been depreciated internationally so you need more to buy the same.
The pound, Euro or Dollar aren't fixed to something like the gold standard so it floats like a feather in the breeze.
If the government continues printing notes then before you know it you will need a lorry load of currency to pay for your groceries.
For reference take a look at the Zambezi currency as an extreme example of QE gone out of control.

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In answer to the question: The sub-prime crisis of 2008 was due to speculation so everyone was convinced some financial instruments were worth more than they really were. Then people realised this was happening and everybody panicked and stampeded all over each other to not be 'the last guy out the door' (aka 'financially ruined'). The dollar and many other currencies took a hit because countries had massive investments in property and mortgages were sold for next to nothing because no-one trusted them to return on the investment.

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5 hours ago, angus said:

Hello,

i am confused, with all of the quantitative easing, where exactly did all of the money go to? Why didn't the increased money supply cause a huge worldwide inflation yet?

will silver come to represent the currency? :)

 

qe or the printing of currency doesn't work like that.

it's like if a company issues more shares(print shares) then

does the share price go down? (there are many more factors

that cause the price of shares to go up or down.) similarly

there are more factors that might cause inflation to go up or

down. pricing have 2 elements, a demand side and a supply

side. (you can say all you want about the decrease in demand

for currency as it fails as a store of value. fact is it's used to

pay the bills.)

qe have to be taken into the context of the much larger and

more complex demand and supply of currency. maybe the

effect of qe hasn't happened yet(things take time in the

quantities considered). we simply won't know until it happens.

(feel free to do the excessive number crunching required for

a better insight)

 

HH

 

Edited by HawkHybrid

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5 hours ago, LHommeDArgent said:

In answer to the question: The sub-prime crisis of 2008 was due to speculation so everyone was convinced some financial instruments were worth more than they really were. Then people realised this was happening and everybody panicked and stampeded all over each other to not be 'the last guy out the door' (aka 'financially ruined'). The dollar and many other currencies took a hit because countries had massive investments in property and mortgages were sold for next to nothing because no-one trusted them to return on the investment.

The subprime crisis was not due to speculation (unless you are talking about the superficial symptoms rather than the root causes) but to the current monetary system (as opposed to a different monetary system - there are a few fundamentally different ones that could be in place). "Speculation" is the official narrative and comes in handy for feeding the generic Western guilt-cult (which is based in Christianity and took several areligious or pseudo-religous, political forms ever since the French Revolution and particularily since WW2) by blaming human greed and on top of that it comes in handy for the ruling socialist class (includes billionairs such as  e.g. Bill Gates) for blaming capitalism rather than corporatism and - the current monetary system which has led to an asset-price inflation not only since 2008 but already long before that.

Edited by silenceissilver

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18 hours ago, angus said:

Could anyone please shine light on Singapore monetary system?

Do assist me :)

Currently, the monetary system is the same worldwide (you seem to mean the monetary policy of Singapore). Central banks and commercial banks creating money as debt. Not long ago, the Swiss rejected to introduce another one, in a referendum (money created as government spending). I guess you mean if they also create an asset price inflation. Given what you say about property prices in Singapore, the answer is most certainly yes. Below is the M2 money supply from 1989 till 2009. if it was a bit more clinched along the horizontal axis or went on to the present (from ca 350.000 to ca  600.000), you'd see better that it is basically an exponential curve. Whenever you see a long term exponential curve (over several decades), you have a strong hint it's bubble territory, almost a 100% indicator (but of course it also depends on the rate it grows with per year, in average). I have made the graph from this data here: https://www.ifa.sg/analysis-singapores-money-supply/ Current M2 suppy, source: https://tradingeconomics.com/singapore/money-supply-m2

This https://en.wikipedia.org/wiki/Singapore_dollar#Currency_in_circulation translates as: They need bolder methods to increase the money supply faster, to me. Also, the link number 9, supposed to show how much it is backed by gold and silver (quite surpised there is any) and how much by foreign confetti currencies, doesn't exist. I translate this as either they changed their webpage or they don't want you to know. All in all, all I can find in a few minutes, tells me: There is no substantial difference to let's say the US Dollar, the Euro or the British Pound

 

image.png.cdc34803c401107431a84b4c6d10acc4.png

Edited by silenceissilver

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On 18/01/2019 at 05:55, angus said:

Hello,

i am confused, with all of the quantitative easing, where exactly did all of the money go to? Why didn't the increased money supply cause a huge worldwide inflation yet?

will silver come to represent the currency? :)

A lot of it is still in the reserve accounts of the banks.

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