How The "QE Economy" Works (And Why It Doesn't) In One Giant Flowchart

Tyler Durden's picture

From liquidity-driven perception to the Keynesian endpoint economic reality... just follow the arrows...

(click image for large legible version)


Or, as Bridgewater notes,

The effectiveness of quantitative easing is a function of the dollars spent and what those people do with that money.


If the dollars get spent on an asset that is very interchangeable with cash, then you don’t get much of an impact. You don’t get a multiplier from that.


If the dollar is spent on an asset that’s risky and very different from cash, then that money goes into other assets and into the real economy.


That’s really how you see the impact of quantitative easing.


Source: $hane Obata @sobata416

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Ass. Manager's picture

All roads lead to QE4EVA.

CryptoCoinUser's picture

Hedge fund computational model?

MummyFunster's picture

It looks like one of those process charts at work where everyone stands around and asks "Did somebody get paid to do that?"

RaceToTheBottom's picture

I think the choice of green in the diagram was a very bad choice.  You should have used red.

Actions have consequences.

You have doomed the world.

MollyHacker's picture

All the arrows pointing to Bitcoin or just one?

IREN Colorado's picture

"This plan makes perfect sense and I endorse it completely. IN FACT I just told the President it will save our economy" -Treasury Secretary Henry Paulson