Why does the United States need quantitative easing, and what is the monetary policy of quantitative

The implementation of loose monetary policy, then means that the first to carry out a large number of investment, to carry out a large number of projects, the implementation of low interest rates, low tax policy, on the one hand, because of the first large investment and large projects, so that many categories are in the steel, cement and other items of the demand increase, on the other hand, low interest rates and low taxes, so that the interest group borrowing costs are reduced, the profit is also greater, which is of course conducive to the development of interest groups. However, the United States is now facing not only a situation of economic recession, if it simply blindly liberalizes its policy and implements a loose monetary policy, it will inevitably lead to further aggravation of domestic inflation, aggravation of fiscal deficits, and soaring prices, which will pose a great threat to the effective demand of residents. And the demand of interest groups is only to protect their own interests

The essence of quantitative easing monetary policy is to activate the money printing machine to inject liquidity into the market when it is divorced from the needs of the real economy.

In the case of low market confidence and shrinking investment, the liquidity released by the quantitative easing monetary policy to the market will not lead to inflation, but once the economy improves and investment confidence recovers, the excessive release of liquidity may turn into inflation.

Especially for the United States, since the dollar is the world's reserve currency, the pricing of the world's major commodities is based on the dollar, and the Fed's implementation of quantitative easing monetary policy will lead to a sharp depreciation of the dollar, which will lead to a new round of resources **** and bury the hidden danger of global inflation.

Monetary policy refers to the general term for the various policies, policies and measures adopted by banks to control and regulate the amount of money and credit in order to achieve their specific economic goals. The essence of monetary policy is that the state adopts different policy orientations such as "tight", "loose" or "medium" according to the economic development in different periods.

Legal Analysis:1Increase China's ** surplus and GDP;

2.Increasing inflationary pressures in China;

3.This led to an increase in the number of currencies in China.

Legal basis: Banking Supervision Law of the People's Republic of China Article 3 The objective of banking supervision and administration is to promote the legitimate and sound operation of the banking industry and maintain the public's confidence in the banking industry.

Banking supervision and administration shall protect fair competition in the banking industry and enhance the competitiveness of the banking industry.

On the volume side, ample dollar investors will flow to emerging markets with positive investment prospects, such as China. During the Fed's QE, global risk assets tend to usher in a strong ** cycle. From the perspective of **, the Fed's "zero interest rate, quantitative easing" policy will objectively lead to a weakening of the dollar and a decline in US Treasury yields.

This will further push USD investors to chase assets with higher expected yields. In the process, non-US currencies typically strengthen, including the Chinese yuan. During both periods of quantitative easing, the global** market achieved considerable gains.

During the same period, the renminbi appreciated.

Legal basis: Foreign Affairs Law of the People's Republic of China

Article 38: To initiate an external investigation, the competent department for external affairs shall issue an announcement. Investigations may be conducted by means such as written questionnaires, convening hearings, on-site investigations, or commissioned investigations. Based on the results of the investigation, the competent department of foreign affairs shall submit an investigation report or make a ruling on the disposition, and issue an announcement.

Article 39: Relevant units and individuals shall cooperate with and assist in external investigations. The competent department for foreign affairs and other relevant departments and their staff shall conduct external investigations, and shall have the obligation to keep confidential the state secrets and commercial secrets that they are aware of.

Quantitative easing mainly refers to the intervention method in which the bank buys medium and long-term bonds, increases the base money supply, and injects a large amount of liquidity into the market after the implementation of the zero interest rate or near-zero interest rate policy, so as to encourage spending and borrowing, which is also simplified as indirect printing of money. The ** bonds involved in the quantitative easing policy are not only large in amount, but also have a long period. In general, monetary authorities will only resort to such extremes if conventional tools such as interest rates are no longer effective.

Legal basis: People's Bank of China Law of the People's Republic of China

Article 4 The People's Bank of China shall perform the following duties:

1) To formulate and implement monetary policy in accordance with the law;

2) Issuing RMB and managing RMB circulation;

3) To approve, supervise and manage financial institutions in accordance with regulations;

4) To supervise and manage the financial market in accordance with regulations;

5) To issue orders and regulations relating to financial supervision and management and operations;

6) Holding, managing and operating the country's foreign exchange reserves and reserves;

vii) Manager of the State Treasury;

8) Maintain the normal operation of the payment and clearing system;

9) Responsible for statistics, surveys, analysis and analysis of the financial industry;

10) To engage in relevant international financial activities as the state's leading bank;

11) Other duties as specified in ***.

The People's Bank of China may, in order to implement monetary policy, engage in financial business activities in accordance with the relevant provisions of Chapter IV of this Law.

Article 5 The decisions made by the People's Bank of China on the annual monetary amount, interest rate, exchange rate, and other important matters stipulated in the **** shall be implemented after being submitted for approval.

After the People's Bank of China makes a decision on other relevant monetary policy matters other than those provided for in the preceding paragraph, it shall implement it and report it to the People's Bank for the record.

The People's Bank of China shall submit to the Standing Committee of the National People's Congress a work report on the situation of monetary policy and financial supervision and management.

Article 7 The People's Bank of China independently implements monetary policy, performs its duties, and conducts business according to law under the leadership of the People's Bank of China, and is not subject to interference from localities, departments, social groups, and individuals.

Article 8 The entire capital of the People's Bank of China shall be funded by the state and belong to the state.

The fundamental reason for the implementation of quantitative easing is that economic development is hindered, and there is no better control measures for the status quo, so the "flood irrigation" has been implemented.

Because quantitative easing is a policy of zero interest rate or close to zero interest rate, the central bank lends a large amount of money, and almost only the principal, and then buys treasury bonds, increasing the supply of base money, which means that there is a large amount of liquid funds in the market, so it is like indirectly printing money. Comic branches.

The U.S. continues to implement quantitative easing by expanding the base money supply, essentially imposing seigniorage on the world. While this policy has supported the United States in expanding fiscal spending and maintaining deficits, it has also led to a continued depreciation of the dollar, a significant increase in global primary commodities, and a significant reduction in the market value of US external debt.

1. Quantitative easing raises a large amount of seigniorage for the United States. Given the dollar's status as a national currency, the Fed implements quantitative easing by issuing a base currency, essentially imposing a seigniorage on the world.

2。Quantitative easing (QE) has provided important support for the expansion of fiscal spending in the United States. With the exception of the third round of QE, which was supported by mortgage purchases**, the other three rounds of QE implemented by the Fed were all Treasury bond purchases to support the United States** in maintaining its fiscal deficit policy and expanding fiscal spending.

3。Quantitative easing has led to a sharp depreciation of the US dollar and global prices**, leading to a sharp contraction of US external debt. The second major impact of the Fed's quantitative easing is a sharp depreciation of the US dollar and a large global commodity policy.

This policy has played an important role in promoting the recovery of the U.S. economy while increasing the issuance of base money, collecting seigniorage, and supporting the expansion of fiscal spending.

The Federal Reserve's quantitative easing policy has played an important role in promoting the recovery of the U.S. economy while increasing the issuance of base money, imposing seigniorage, and supporting the expansion of fiscal spending. Given that the first round of QE was a reasonable response to the financial crisis, and that the third and fourth rounds of QE have just begun, we focus on the combined impact of the second round of QE on US economic growth.

The depreciation of the US dollar caused by the Fed's quantitative easing policy will not only have a direct impact on the global economy through the shrinkage of primary products in the international market and the value of US debt, but also have an impact on the economic growth of other countries by affecting US imports and exports.

quantitative easing

I always hear this word when I listen to the news lately.

I also briefly learned about it, which is probably to print money for a fixed amount to increase market liquidity.