Cash QE = dollar debasement

As well as the cut in funds rate, the FOMC confirmed yesterday that it is winding up the Fed’s printing press again. No wonder gold and silver are going to the moon!

We knew this was going to happen because Jerome Powell telegraphed it at the last FOMC meeting. With respect to QE, the FOMC wrote in its statement yesterday,

“The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis.”

Reserve balances having declined to ample levels is poppycock. I refer you back to the days of required reserves, which worked satisfactorily until March 2020 on the eve of covid lockdowns. That far lower level of required reserves with the excess removed tells us that reserve balances are still too high for a properly functioning banking system.

This new QE is the thin end of a potentially enormous inflationary wedge. The other