[John Dunn]

Thank you Steve from Virginia. I understood your comment in every detail, which is more than I can say about the original article above ‘The Golden Dilemma’.
I am not an unintelligent person, and if something is explained clearly and in some detail, I usually ‘get it’. I’m afraid that I find many articles here on TAE either :
~ Poorly explained or
~ Written to deceive.
When you re-read the article above, each paragraph appears logical, but as it moves on the next paragraph, I feel as if some convoluted mental shell game is being performed.
If I am wrong,… MAKE IT SIMPLE so that even I, can understand.
If your argument is correct it must surely be explainable in a simple way for all to follow.
Again thanks to Steve from Virginia, who did explain his position very well. And I think your take on Gold is the one to take away from this.

[John Dunn]

skipbreakfast, Thanks for the reply
If this is actually what is happening, then it follows that Central Banks can under various named guises manufacture money as QE 12… QE27,… QE144, until the whole of the bank’s bad debt is Jubilee’d away. (Plus NO inflation risk).
But if this bad debt is slowly being neutralised in this way, who are the losers and winners in this sleight of hand game?

[John Dunn]

Something is bothering me here, regarding QE. And I would appreciate better minds than mine, to pick it apart.
Billions of £/$ are being manufactured (QE’d), out of thin air and given to the banks. The government say that they do this to ease pressure on the banks and expect the banks to lend more into the wider economy. The fear then is that this invented money will create massive inflation as it filters out into the wider economy.
Firstly. It is not filtering out into the wider economy.
Second. It is not causing inflation.
So the question to be asked is why do a QE2,…QE3… QE4……….?
Could it be because it was never intended to filter out into the wider economy, and therefore was guaranteed to never be a risk to inflation?
There is another way of looking at what is happening. There is much talk on various sites of the need for a Debt Jubilee. Wouldn’t it be wonderful if the government just cancelled your mortgage or car loan? Not going to happen!
But what if QE has been designed as a selective Debt Jubilee? For the banks only. What if, despite all the talk of QE pumping money into the economy, it was never really designed for that. It’s real purpose is to simply cancel out some of the bad debt on the banks balance sheets. Each QE input is a drip drip, partial Debt Jubilee for the banks. Thus, QE never was intended for, and never will, find its way into the wider economy.
If this is a selective Bank Jubilee then it begs many other follow on questions. For example, if some of those bank bad debts, have been Jubilee’d away with QE, are those (cancelled out), debts still being serviced with payments of principal and interest?

Update :

So I suppose my notion that QE is really a Bank Debt Jubilee, answers rlmrdl’s question, “Where is the pathway?”, for the money to cause Hyperinflation.
QE, wasn’t designed with a pathway. It was never intended for the wider economy.

[Author]

Posts