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FAQs Frequently Asked Questions

Market Lab Report
Please explain quantitative easing (QE)
QE began in late 2008 to address the financial collapse. QE is a process whereby the Fed's central bank buys bonds from the government. Since 2008, this buying pushed up bond prices thus had reduced interest rates to historical lows. Since the lows, the Fed has hiked rates by 25 basis points each time, though rates still remain near historical lows.

The Fed is now reducing its balance sheet. To reduce its balance sheet, the Fed can sell securities on its balance sheet, or it can choose not to reinvest in maturing securities. By simply letting the balance sheet slowly decline by not reinvesting the maturing assets will put less pressure on the bond market. The Fed is doing both which is putting pressure on the bond market. It plans to increase its sale of securities but only if the economy will allow for it.

QE is the largest, legal ponzi scheme on the planet, and is the reason why the average lifetime of fiat currency is around 40 years. Take a penny at the time of Christ and compound it at 2%/year. You'll see there is nowhere near that amount of money in the world. Currency collapse is nature's way of sweeping away the old order. But this time, decentralized currencies which cannot be controlled may become the new global standard though government intervention will delay the process. 
First published: 6 Feb 2018
Last updated: 6 Feb 2018