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What Would Happen to Inflation If the Fed Announced $40 Trillion a Month in QE?

Summary:
QE Parameters trillion a month in QE for 24 months, no matter what, announced upfront.3-month bills at 0% rolling everything over each month while adding a new trillion each month.Zero percent interest paid to banks on excess reserves.What Would Happen?Hyperinflationists and inflationists would come out of the woodwork on the announcement screaming inflation or worse.In two years, M1 would rise by 0 trillion dollars, nearly a quadrillion dollars.Since M1 is currently about .7 trillion, M1 would thus rise by about 5,000 percent. What About Inflation?Q: What would a 5,000% increase in M1 over the course of two years under the parameters as outlined above do to inflation?A: Not a thingThere is a stimulus impact of holding down short term rates, but the Fed was already committed

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What Would Happen to Inflation If the Fed Announced $40 Trillion a Month in QE?
Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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