Comment: Is QE Inflationary or Deflationary?

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Is QE Inflationary or Deflationary?

From a Wall Street Journal blog.......

http://blogs.wsj.com/economics/2012/12/27/secondary-sources-...

"Tyler Durden [Zero Hedge] highlights an interesting report by Stone & McCarthy Research Associates that finds that the Federal Reserve will earn nearly $90 billion in 2012. Of this, roughly $87.5 billion, a new record high, will go back to the U.S. Treasury’s coffers, which should quietly do a little to help the nation’s bloated finances. “The world’s most profitable private entity that is in business to generate profits via speculation in financial markets is, drum roll please, the Federal Reserve,” Durden says. “Since 1947 the Federal Reserve has paid the Treasury roundly $975 billion, about 1/3 of which has been paid over the past 6 years. In other words, the cumulative Federal deficit since 1947 has been reduced by nearly $1 trillion … due to the repatriation of Fed earnings to the Treasury Department.”

Here is my take on why fed QUANTITATIVE EASING may be more deflationary than inflationary in a video I recorded when I worked at Thomson Reuters......

06/06/11 Inflation Alert: QE2 May Be Stoking Deflation, Rombach Says... http://reut.rs/ieLqhn

Ed Rombach