.Recently, many bullish gold analysts have started questioning their own theory that money printing causes inflation.
2.Commodity prices have fallen, despite accelerated QE.I would argue that money printing does cause inflation, but only if what is printed overwhelms the assets that are destroyed, in global markets.
3.The Fed continues to buy billions of dollars of illiquid and arguably-worthless OTC derivatives each month, with printed money.If the Fed printed more money than what is required to purchase those assets, inflation would likely be much higher than what it is now.So far, that’s not happening.
4.Quantitative easing is not the same thing as just printing money and pushing it into the banking system.
5.The inventory of marked-to-model OTC derivatives held by commercial banks is gigantic, so it could be many years before serious “cost push” inflation envelops America.
6.The Fed believes in a business cycle that lasts for about 8 years.The last cycle probably ended in 2007, which means that the…
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