The question of quantitative easing in the United States, why does the United States need quantitati

Generally speaking, the face value or coupon rate of the bond is fixed (there are also floating rate bonds, but generally this kind of bond will have a fixed basic spread), because of the fixity of these will lead to the cash flow of the bond is predictable under the premise of no default, in many cases only considering the interest rate on the premise of evaluating the value of the bond, the interest rate is inversely proportional or negatively correlated with the bond, so there will be an increase in interest rates that will lead to the rise of bonds, and a decrease in interest rates will lead to the rise of bonds.

For the above materials, it can be understood that the behavior of institutions selling treasury bonds will eventually lead to the rise of treasury bonds, and the yield of treasury bonds will lead to the rise of the yield of these treasury bonds, and in many cases, the yield of the corresponding maturity of treasury bonds will be regarded as a risk-free rate of return of the period, and because the sale of treasury bonds will lead to the rise of treasury bonds, which will indirectly lead to the rise of various interest rates in the market.

For now, the market basically expects Bernanke to maintain the current policy. Judging from the Fed's recent speeches, there are few** that QE should be curtailed immediately, and more ** prefer to wait for 2-3 months of economic data before making a decision. This also roughly coincides with the time period that Bernanke previously said in his testimony before before Congress.

Recently, the US economic data has been mixed, and the recovery in the job market has not been as strong as expected. This could cause the Fed to change its tune and even try to change investors' expectations that it will downplay its imminent decision to exit QE. From the previous speeches of the Federal Reserve, the Fed is currently facing the problem of whether to reduce the scale of QE, that is, to gradually reduce the monthly asset purchases of 85 billion US dollars.

In addition, investors should note that even if the scale of asset purchases is reduced, it does not mean that monetary policy has begun to tighten, but only that the pace of easing has slowed down.

Most of the money will flow back to the United States, and the dollar will rise, and interest rates will start to rise as the dollar rises, but that will be a story for later.

The sale of Treasury bonds reduces the amount of money in the market, and interest rates go higher.

To put it simply, institutions dislike the low interest rate on Treasury bonds, so they sell it and use the money to speculate on other things. If the United States still wants to sell its Treasury bonds well, then there are always two ways: 1. Raise interest rates, and if the interest rate is high, some people will naturally buy 2

The dollar appreciates, the dollar has been appreciating, other countries will buy, and the income from other countries buying is interest + exchange rate appreciation.

Quantitative easing is, to put it bluntly, printing money.

The implementation of loose monetary policy, then means that the first to carry out a large number of investment in the country, 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 of steel, cement and other items of 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

Many of us are wondering why the United States will implement quantitative easing, and many people have expressed some of their own views, but as a financial planner, I feel that these views are too theoretical, and cannot explain the actual intention of the United States to implement quantitative easing

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First, the United States implements an economic policy of quantitative easing, which can increase the income of the people when the economy is in a downturn, which can curb the contraction of domestic consumption, reduce people's pessimism about the economy, and improve the confidence of the whole people.

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Second, as far as the United States is concerned, the economic policy of quantitative easing in the United States can be a depreciation of the dollar, which will make the United States have an initiative in the economy, and those countries that buy US Treasury bonds will lose a large amount of capital, thereby reducing the economic pressure on the United States and transferring the economic losses of the United States.

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Second, the economic policy of quantitative easing in the United States can restore the vitality of the market, in fact, this is because quantitative easing is a signal, a positive signal, which can alleviate the crisis of the US debt, pass on its own crisis to other countries, and force other countries to appreciate their own currencies, such as the way the United States dealt with Japan in the 80s, this trick they continue to perform this time.

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Fourth, the United States' economic policy of quantitative easing can attract foreign capital and thus promote its own investment; since there will be a large demand for dollars in the international goods market, a large amount of goods will be issued, which is naturally a good thing for the United States.

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Fifth, in the case of economic depression, quantitative easing policy can play a role in restoring the economy, and at the same time can also promote market investment, the United States is a veteran in this regard, so now the United States economy has begun to recover further.

Based on the above, you can see that the United States implements quantitative easing economic policy, so that their economic policy, every time the United States encounters a crisis, they will use quantitative easing economic policy, which is the most beneficial economic relief method for the United States, and the effect is good every time.

Indirectly caused the over-issuance of China's currency, the impact of which is self-evident.

The US quantitative easing program did increase the number of currencies in the market, but it did not affect the value of the dollar. In fact, the ratio of money in the bank to the money circulating in society has changed. This is the same as China's increase in deposit reserves, the difference is that people use market means, and China uses first-class means.

Since most of the world's international** settlements have been in US dollars so far, the amount of US dollars in society must have a direct impact on global liquidity. To put it simply, when there are no dollars in hand, many international ** have to be stopped or postponed. Due to the great influence of the international monetary policy of the United States, many countries and regions are trying to get rid of the situation of the single international settlement currency.

The creation of the eurozone is the best challenge to the hegemony of the dollar, and the Asian dollar plan that China is currently trying to pursue has a similar effect.

The so-called "quantitative easing", or quantitative easing, is only a central bank reserve increase. In fact, all central bank QE involves asset purchases--- mainly the repurchase of bonds, as well as the bank reserve account of these assets to the central bank.

Affected by the slowdown in U.S. economic growth, the U.S. dollar continues to ** and the U.S. dollar, as the world's main settlement currency, is once again suffering from a crisis of confidence. The depreciation of the dollar has led to global inflationary pressures and has led to a decline in the wealth of foreign exchange assets held by dollar reserve countries.

Quantitative easing (QE) in the United States is a monetary policy in which banks raise money through open market operations**, which can be seen as "creating a specified amount of money out of nothing", which can also be simply described as indirect printing of money. Its operation is that the bank purchases through open market operations, etc., so that the funds in the settlement account opened by the bank in the central bank will increase, and new liquidity will be injected into the banking system.

The "quantitative" in "quantitative easing" refers to the amount of money that will be created in a specified amount, while "easing" refers to reducing the financial pressure on banks. Banks use the money they create out of thin air to buy bonds in the open market, lend money to deposit-taking institutions, buy assets from banks, etc. All of this has helped to lower bond yields and lower interbank overnight rates, leaving banks with a large amount of assets that can only earn very low interest rates, and the central bank expects that banks will be more willing to lend to earn returns to ease the financial pressure on the market.

Quantitative easing tends to depreciate money when monetary policy has loosened, or when the assets purchased will depreciate in response to inflation (e.g., Treasury bonds). Because QE has the potential to increase the risk of currency depreciation, QE measures are usually introduced when deflation is experienced. Continued quantitative easing will increase the risk of inflation.

Under the partial reserve system, banks maintain a certain percentage of reserve funds, and the rest of the funds can be used for loans. From the increase in deposits in the process of quantitative easing, banks can create more money** by borrowing, which is known as the deposit multiple effect. For example, assuming the reserve requirement is 10%, the final currency** that can be generated for every $10,000 created by QE is $100,000.

Quantitative easing (QE) provides sufficient liquidity to the domestic interbank market, significantly reducing borrowing costs, and ultimately benefiting all borrowers to support the overall functioning of the economy. In general, QE can support the economy as a whole and "help mitigate or contain the impact of an economic reversal." ”

The purpose of this is to devalue the dollar, so that other currencies will appreciate against the dollar, but the foreign debt owed by the United States will shrink and thus benefit. Although described as "printing money on the switch", QE is usually just an adjustment to the computer's accounts. For a country to practice quantitative easing, it must have control over its currency; So, for example, individual countries in the eurozone cannot unilaterally introduce quantitative easing.