The Fed Has Bought 70% of Net Treasury Issuance Since October
thesoundingline.com
thesoundingline.com
If you mean unwinding our current loose-money global monetary system of fiat currencies, I'm not sure that genie can or will ever go back into the bottle. Let's hope the next recession is gentle.
On one hand I agree with you completely, on the other hand a very hard painful reset is kinda needed too. I really hope it doesn’t come to the later, but I’m not sure we can avoid it long term.
mind blowing? yes.
but if you are not part of the fed, then you are absolutely being denied the opportunity to benefit from printing more fiat.
> The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.
Regional federal reserve banks are also not private corporations, although their organization structure shares some features in common with them. Member banks that participate in the federal reserve system, on the other hand, are typical companies.
In 2019, the US government spent about $400B on debt interest payments. The overall money supply (M2) grew by $900B, about 6.2%. Constant-dollar GDP growth is ~2.3%, and inflation is ~2.9% so that's about $145B of paper monetary growth not backed by assets or general decline in purchasing power. (Sorta. Maybe. The US can implicitly share in growth not reflected in GDP, which complicates all of this immensely.) Assuming that's fair shorthand, how do we make up the gap? In 2008, the paper 'value' of a whole bunch of physical assets (homes) diminished, closing the difference at the expense of homeowners and investors (and the USG).
We could see something like that again: private equity and credit card debt look like plausible options, and student loan debt may be "nondischargeable" but that doesn't stop people from defaulting or dying indebted. The USG could theoretically fail to pay its debts in full; that would only require a Greece-style 'haircut' rather than an outright default, but it's still basically out of the question. If investors arrange to not lose the full debt, various rearrangements (bailout + taxes, diminished public services, bankrupt pensions, etc.) could make up the difference by passing the damage to non-investors. Perhaps we could see a major US bond shareholder wiped out without transfer of the debt? I'm not actually sure what happens to those bonds when the bondholders are embargoed or cease to exist in sufficiently-unstable situations. Fascinatingly, a student loan collapse could be partially covered by university bankruptcies: since the value of a degree greatly exceeds the summed value of four years of courses, students are functionally investors betting on the continued existence of their school. (As ITT Tech students found out to their detriment.)
Or, of course, we could see inflation and value growth outpace M2 growth a few times and cancel it all out without any dramatic shift. People aren't in a hurry to call this in, and offsetting it doesn't even require the US to run a surplus.
I’m potentially crazy here but I’m laughing off every article that calls stocks or bonds or real estate overpriced. As long as the economy keeps running this way there’s a never-ending supply of money and nowhere else for it to go.
Sure there is, it can be destroyed in asset price resets or debased in terms of purchasing power by the Fed (which is what plenty of the stock market gains since 1970 are).
You could make the same claim about Japan - an extremely wealthy nation relatively speaking, with one of the world's largest stock markets. Tokyo also has very high priced real-estate. And yet the Bank of Japan is fully capable of decimating their national wealth through Yen debasement, chopping about 1/4 to 1/3 off all their wealth in the past decade.
The Japan scenario, which the US is following, is gradually eroded growth prospects as debt consumes all capital available & necessary for investment to grow the economy. Eventually you reach a heat death, perpetual stagnation and conflict with the debt load and its interest costs; which requires constant debasement of the national currency - once you can't afford the interest costs, as the US can't any longer - until you destroy enough of the debt to climb back above water and free up capital for new investment again. That process becomes an accelerating downward spiral until you violently change something in the equation (one time massive currency adjustment, spending cuts with massive tax hikes causing a severe and prolonged recession, etc).
There is a reason gold is now normal up at $1400-$1600, instead of $300 20-25 years ago. That's all dollar destruction (also represented by the skyrocketing GDPs of most nations in USD terms from 2002-2008 as the dollar imploded and by numerous other prominent commodities such as oil).
That much destruction happened due to a comparatively modest lack of fiscal discipline during the Bush years. Just wait until you see what the present course causes. The rich will not be able to keep up, and corporate earnings sure as hell can't (they're not growing much as it is). To make matters worse, the China miracle is over, the S&P group can't lean on that any longer, there's little to no growth anywhere in the largest economic zones.
The Fed will have to get more drastic by the year with its debasement efforts (aka QE aka debt monetization). There will be a tipping point (sooner than later given the rate of debt increase) where the wealth can't outrun it via traditional assets like housing or equities. Might have ten good years left of potential asset floating, where you can semi hide from the Fed in the stock market (give or take a recession or downturn that will claim some of that potential). There is nobody to buy a trillion dollars per year of new US Government debt; and nobody that is eager for $20 trillion of new debt at 0-2% yields. So from here on out, it's a Fed debasement party; asset price increases can outrun it for a while, assisted by perma low rates. That Federal debt load will hit $40 trillion in ~11-12 years however, and the heat death will climb ever closer as GDP growth sinks toward zero Japan style.
Why don't you read about how it actually works. If you're American, your tax dollars are paying for the wonderful data collection and analysis the fine people at the BLS perform:
Education is not in any way a fixed supply. We can train more teachers.
At this point, it's not to chase yield, but simply to try and not shrink.
This is the reason why people are willing to buy debt with negative interest (e.g. EU sovereign debt): they're actually willing to pay money to shield capital from the impending implosion rather than grow it
Edit: or, better said: people are willing to buy debt with negative interest rates to get some sort of a guarantee on the size of the haircut that's coming their way.
[0]: https://www.wsj.com/articles/the-fed-is-buying-bonds-again-j...
We haven’t hit target inflation, because labor costs have been resisting upward pressure due to underemployment. The fed thinks it can paper over structural problems with cheap money, resulting in capital asset price inflation and increased wealth disparity...furthering barriers to real wage growth.
That is only true when the President has an (R) next to his name. (D)-type Presidents do not enjoy this privilege from the Fed.
It's doing great if you ignore budget deficit, multiple debt balloons (national/municipal/auto/student), and looming trillions of unfunded liabilities. What could possibly go wrong?
The problem is finance is by far the largest sector of the US economy, so when you look at aggregate GDP numbers, the US economy looks great because the modest gains in finance are more than compensating for the huge reduction in output in the smaller sectors. It's the same story for the stock market: the market cap of the stock market is heavily weighted towards technology stocks, which is compensating for the poor performance in lagging sectors.
Real income/wages are flat, the many tariffs and economic policy choices made by the current administration has slowed if not stopped manufacturing (steel tariffs especially), the rate of auto loan defaults is at a record high (see 2008 mortgage crisis), and worse. Adding $1 trillion of debt per year is insane and would send 2008-2016 debt hawks into a tizzy yet the current admin vastly increased the deficit over the previous administration. Most of this is tax cuts from the 2017 bill which disproportionately go to corporations and super wealthy. Tax cuts for corporations do not expire whereas those for citizens will sunset. These tax cuts have led to massive stock buybacks which artificially buoy the stock market (which is why it's the only 'good' thing about the economy as a whole right now).
The best news of each monthly job report, jobs gained, has been rolled back by later reports allowing the administration to trumpet growth and improvement but leave out how off the numbers really are each cycle. Also, most of the 'new' jobs are part time, low wage, low skill, or gig economy work that often doesn't pay a livable wage or is a supplement to another low paying or part time job. That pattern does not lend itself to a strong, robust economy but can create a short term projection that appears so.
We recently hit a known recession indicator where the Treasury yield curve inverted. An inverted yield curve occurs when long-term yields fall below short-term yields like when 1 year bonds have higher interest than 10 year. usually the long term investment has higher returns except when analysts or brokers predict a crash is coming. Since this metric was tracked, we have entered a recession within 24 months every single time the curve has inverted. This includes the negative bond rates we saw after 2008. Today we might be paying too much attention to this indicator for it to still work that way but it's still important.
For all intents and purposes, the Trump economy is not good, flat, and falling. We may see a massive correction once stock buybacks end or are banned, corporate taxes are raised by a liberal congress, or any number of policy changes. Manufacturing is set for layoffs and reductions through 2020 (see US Steel closing sites in Michigan) and I'm personally saving for a down payment on a house when the market crashes in my area.
I'm curious, what indicators are you going off to think they 'all' suggest the economy is strong? It may be your sources are lying by omission or spinning information to look good when it isn't a real representation of the economy, like pointing to stock market highs that mean almost nothing. We've crossed 26000 in the Dow averages like 5 times in the current admin, that isn't stable at all but a pattern of rise/fall boom/bust that is not sustainable.
I do not seem to find confirmation to the above.
Instead there seems to be slight growth in hourly earning, according to this
https://www.bls.gov/news.release/pdf/realer.pdf
(page 5, Jan 2020):
- Dec 2018: +1.3
- Oct 2019: +1.3
- Nov 2019(p): +1.1
- Dec 2019(p): +0.6
Mar 2019: -.3
Apr 2019: -.2
Oct 2019: -.2
Dec 2019, -.1 (noted as a .1 lift but a .2 CPI increase to offset to -.1)
Other sources do show a low growth rate vs a flat line, but it is still much slower than before the 2008 crisis: https://www.bls.gov/news.release/realer.nr0.htm
"From December 2018 to December 2019, real average hourly earnings increased 0.7 percent, seasonally adjusted. The change in real average hourly earnings combined with a 0.6-percent decrease in the average workweek resulted in a 0.1-percent increase in real average weekly earnings over this period."
A .1% real average weekly earnings increase YoY is hardly worth writing home about and more a sign that something isn't working for most Americans. It's basically flat.
you will see exactly the numbers I have posted.
I think you are looking at >".. Real average weekly earnings decreased 0.2 percent over the month due to the decrease in real average hourly earnings combined with no change in average weekly hours. Chart 2: Over-the-month percent change in real average hourly earnings for production and nonsupervisory employees, seasonally adjusted, December 2018–December 2019 ..."
Factory output will slow. And this will affect the entire nation’s export engine to the world, and including the US.
How do you think this will affect the stock market? It kept going up in a straight line, until the coronavirus outbreak, and then SPY fell 10 points off.
Sort of. It was a swapping of short term liquidity for assets across the curve. Which is why it was fundamentally different from what the FED is doing today.
"which is why it wasn't noticeably inflationary any of the times it was done"
This is quite a strong statement. I would disagree. My model says it was inflationary. The counterfactual is "what would the inflation/deflation rate be in the absence of QE all else being the same?". Such counterfactuals are hard to come by, which is why this is such a dismal "science." At any rate, it cannot be denied (IMHO) that actual QE depressed interest rates available to economic actors.
https://www.fxstreet.com/news/kudlow-feds-t-bill-purchases-a...
I agree that counterfactuals are almost impossible to know in economics, but if predictions on one side repeatedly turn out wrong, then that side is probably wrong.
You can find innumerable doomsayers that predicted hyperinflation, and a loss of faith in the dollar and bonds. All of those people were completely wrong, and in fact the dollar strengthened, yields plummeted, and consumer prices were stable.
https://fred.stlouisfed.org/series/BOGMBASE
QE has not caused excess inflation in terms of the consumer price level, but it has dramatically increased the price of interest-rate sensitive assets like real estate, equities, and bonds.
https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
Would you say this is now the new norm? Or something that will come and go as the trends change in the repo markets?
So yea if U.S. government debt is defined as money, then I guess the U.S. government buying its own debt back with printed money is just "swapping assets". Surely however there are implications of a country indefinitely buying back it's own fiscal debt with printed money, even if they tend to be exaggerated since we're not exactly seeing hyperinflation now.
The dollar's dominance is slowly weening as Iran now sells oil to China using the Yuan. The IMF also has a potential replacement reserve "currency" called Special Drawing Rights (SDR). Though it's not technically a currency but instead it's more an index based on basket of currencies. That basket includes US Dollars, Japanese Yen, the Euro, Pound Sterling, and most recently the Chinese Yuan.
Although the Libra Wikipedia page indicates that idea has been deprecated:
> As of January of 2020, Libra is said to have dropped the idea of a mixed currency basket in favor of individual stablecoins pegged to individual currencies.
https://files.stlouisfed.org/files/htdocs/publications/revie...
The ultimate effect is an increase in the money supply just like normal expansionary Fed operations, just through different means.
Also QE1 and QE2 involved the Fed buying "non-traditional" assets like mortgage-backed securities that were toxic at the time and some of which "fade away" over their lifetimes (e.g. an MBS is not worth anything once all of the loans composing it are paid).
Fortunately it's boring and complicated which is a built in guarantee that a large percentage of people will never care about it.
"...recipients of new money enjoy higher standards of living at the expense of later recipients..."[0]
[0] https://en.wikipedia.org/wiki/Richard_Cantillon#Monetary_the...
+50 internet points for you!
Stocks go up and down. When the whole reason that stocks go up is because a arbitrary number inside the fed and treasury databases went up, I'd argue that move up probably won't last forever. If you time the market then maybe you could profit off of this. Timing the market is hard, even when you can see the bigger picture.
But no, the .01% are the PE people who are using this imaginary money to transfer possession of real assets to themselves with 0 interest loans which will be subsidized as "too big to fail" in the event the whole scheme doesn't work out and the executives who are buying their own stock with the money to trigger their own 7 and 8 figure incentive packages before the scheme collapses then further triggering their golden parachutes.
You aren't the smart money here (neither am I).
If your equities are going up 10% a year but you only have $20k in the market, but make $100k in salary, and your salary growth is falling behind the cost of living, you're not doing well, particularly compared to the person with $100M in the market and not going to work for a living.
Turns out when you create methods to transfer wealth within a society, whoever has the most power in that society usually uses it to capture wealth. We already have a type of de facto socialism, it's just controlled by the ultra wealthy for their own benefit.
I happen to be in the Hayekian camp that says this isn't really a just a failure to correctly implement socialism, this is an actual property of all socialism. Obviously you could argue that, but this seems to historically generally be true.
I believe that even if a well intentioned Bernie type came in and created a wealth transfer system, over time that system would be captured by the powerful and still end up transferring wealth back to them. You can be guaranteed that at a minimum there will be an attempt to do this.
Ironically, a switch to a more truly capitalistic situation where businesses had to make money in the marketplace instead of rent seeking for conducive fed policy would probably be less friendly to large business interests on average.
You focus so much attention on the Fed you lose sight of the fact that rent seeking would shift from the Fed to the Customer.
The problem is fundamentally tied to conservative investment behavior. Given a rational choice, most people lend money to the people most likely to pay it back which are the same entrenched players the lenders are already dealing with.
Throw in the wage growth stagnation incentivized in order to put on the appearance of bigger growth numbers, and you develop a clot in the flow of money to the labor class, therefore decreased mobility from the labor to capital side of things.
Throw in hyperoptimization facilitated value deserts around rapidly consolidating industries, and you have a perfect positive feedback loop to enable wealth extraction from the middle class, while the capital wielders are scratching their heads wondering where all the new blood is.
Crushed with debt, bled dry by the XaaS revolution, exorbitant uncontrolled healthcare costs, and in a distorted market in which the name of the game is to try to keep people buying for the love of God.
Agriculture is already starting to suffer from over consolidation of the dairy industry since Walmart's vertical integration combined with USDA policies favoring the hyperoptimized industrial farmer over everyone else.
Something has to give. Will be interesting toseewho throws up their hands first; Bankers, Business, the Fed, or Labor.
https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...
> Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis.
Furthermore, correlation is not causation, but if you look at graphs of when economic productivity diverges from worker compensation (https://www.epi.org/productivity-pay-gap/) the systemic divergence occurs suspiciously close to 1972, which is right after Nixon Shock, when the dollar ceased to be tethered to a neutral third party (flawed though it may be) and began to solely be in hands of policy interests. Yes, the EPI draws the line at 1979, but really? Do we not have eyes?
It's one of many reasons the markets might be going up, along with slow global growth around the world (where else should you put your money?) and potential global instability (Hong Kong, Iran, China; USD still a safe haven).
>artificial stimulus
What is the difference between natural and artificial stimulus?
>why the economy shuffles from bubble to bust.
You see this particular argument all the time, but one look at the data shows that the boom/bust cycles of modern times are few and far between relative to 30,40,50 years ago, and in particular when compared to the pre Federal Reserve days.
Booms and busts happen in every economy, ever, throughout history, with or without central banks.
It is what gold bugs call printing money... or a money drop that goes straight to the leveraged banking system which lends out a multiple of the money from the Treasuries now held at the Fed and earns interest on the full levered amount. That has an inflationary effect, but mostly on financial instruments (stocks & corp bonds) since that's what banks usually buy with their new found money... and the Fed hopes that has ripple (wealth) effects on the rest of the broader economy.
"Investing" when there's nothing to invest in is pointless, and if you hadn't heard, unemployment is near all-time lows; companies are hiring.
Looking at it another way, it’s no different than some guy printing counterfeit US dollars in his basement and using them to buy real assets. The outcome is the same in either case - the counterfeiter and the government both get to spend newly created money while simultaneously devaluing of the purchasing power of the dollar for everyone else.
The government regularly spends more than it takes in from taxes by issuing bonds. People buy the bonds because the US government is considered quite safe. That in turn lets the government spend money, which ultimately makes its way into the economy as a whole. People use that money to hire workers, buy stocks, etc, making the economy look good.
But the Federal Reserve Bank has the ability to invent money for buying those bonds out of thin air. That means the bond prices stay high (and the interest rates low). That implies that the current strong economy is an illusion, and that's worrying.
The expected response of extra money being pushed into the economy without added value is inflation, and the inflation rate has crept up over 2%[1]. It's actually a little surprising that it has taken this long, since this is actually something they've been doing for over a decade. There is considerable debate about that, but it may be that the inflationary chickens are finally coming home to roost -- in which case things might get real bad real quick.
tl;dr: this indicates that the economy may not be as strong as we think, caused by economic manipulation by the Federal Reserve to make the economy seem stronger than it is.
The government never retires, and never has to pay off its debts. That gives it a lot of leverage, but it also obligates new citizens to a share of the debt as soon as they're born. Your parents can't pass their mortgage debt to you, but they do pass on their share of money that the government has borrowed.
So the government can safely borrow money, but at some point it will accumulate so much debt that people begin to doubt its ability to pay it back. Whoever is left holding the bag at that point will be in very deep trouble.
I don't know what point that is. Interest rates are still low, so the answer appears to be "not today" (and "not imminently"). But the article points out that the low interest rates may be something of a false indicator.
So as you say, responsible debt is good. But decreasing revenue via tax cuts, and increasing debt accumulation, at a time when the economy appears to be booming doesn't appear to be responsible. It reduces the ability to borrow in the future, at precisely the time you could be increasing that ability by paying down old debts. Especially if you're then covering it up by borrowing in a way that's hard for people to see.
Currency issuers can always pay any debt denominated in the currency that they issue. It is literally impossible for a currency issuer to be forced to default.
"But decreasing revenue via tax cuts, and increasing debt accumulation, at a time when the economy appears to be booming doesn't appear to be responsible."
That's a sane position, but the argument against a Federal Balanced Budget Amendment comes from the opposite case. You want the capability to deficit spend during recessions. The Federal Balanced Budget Amendment forces you to make the wrong decision of cutting spending during recessions, driving the nation deeper into recession.
When factories are idle and unemployment is high, it is vicious to claim that the best policy is to choose to throw more people out of work. Federal spending should be explicitly countercyclical.
This is straight up nonsense. All currency issuers have the ability to spend which is skew from their need to tax. Taxes do not fund Federal spending. Taxes destroy money, and thus control inflation. That is a fundamentally different role.
https://www.bradford-delong.com/2013/04/abba-lerner-1943-fun...
The rules are different for Currency Issuers (nations with a fiat currency) versus currency users (citizens, provinces, and nations on the Gold Standard).
For the United States, which is a currency issuer, Congressional appropriations create money. Taxes do indeed return money to the government from the private sector, but there is no need to claim that money is "recycled" for spending purposes.
Revenue is an obsolete concept for currency issuers.
> For the United States, which is a currency issuer, Congressional appropriations create money.
What is your basis for claiming that this is true?
> Taxes do indeed return money to the government from the private sector, but there is no need to claim that money is "recycled" for spending purposes.
Are you saying that it isn't recycled? If not, what do you think happens to it, and what is your basis for claiming that it is true?
> Revenue is an obsolete concept for currency issuers.
Only if you want staggering amounts of inflation. It is true that a currency issuer can just issue more money, and therefore could survive (short term) with no tax revenue. But that debases the currency, and in the end destroys it.
And, I'm going to need to see better answers to these points than "But MMT says it's true!"
https://www.stlouisfed.org/open-vault/2019/january/fed-infla...
At least it's been true for quite some time:
https://www.thebalance.com/what-is-the-value-of-a-dollar-tod...
It seems all invested parties are budgeting at least 7% annual growth in asset prices, from the government's pension fund liabilities to people's 401k and IRAs. Since, voters won't like to see their balances go down, the powers that be will do everything they can to prevent it. And in the absence of a growing young population, I don't see many options other than devaluing currency.
This is the modern equivalent (i.e. the vocabulary and implementation means have changed, but not the deed in itself).
A one-year $1,000 T-bill means that in one year from the date of purchase, it can be redeemed for $1,000. So if you pay $980 for it, then that means that your effective interest rate is 20/980 ~= 2%.
The Fed wants interest rates to stay low, so they're driving up the price of treasury bonds/notes in order to reflect that. That, in theory, means that financial institutions will prefer to lend to consumers/businesses/etc. for higher yields, rather than put their money into treasuries.
Usually these sell at auction and the Fed buys some of them, but otherwise the market determines what the future value of money will be based on general return on capital.
If history repeats itself, next step is empire falls.
The next recession is going to be a bloodbath. Not sure what else the Fed can really do and it’s not as if Congress can cut taxes too much lower. The last 10 years we’ve been doing the opposite of what we should have. But at least the boomers got one last big fake boom-bust cycle to live through! Just like the glory days.
2008 Crash and how US Fed handled it means that they have to pump money into stock market for the next 30 years(20 left) until all the mortgages that they hold fully unwind. What could go wrong?
Well, the US Fed track record for such strategies being successful over 30 years is vacant as it never has been done before!
ie at least our problem with real estate-homes outpacing income gets worse
(Commence the downvotes.)
Edit: Then again, their articles sometimes feature near complete fabrications, i.e., "Minneapolis Fed president Neel Kashkari [...] said that it was time for the Fed to pick up where the USSR left off and start redistributing wealth", which is not even remotely close to what was actually said.
This is very wrong. The "evidence" they provide is nonexistent. The ZH link is typical ZH garbage. A bunch of assertions without basis with a few misconstrued quotes thrown in.
So not nonexistent. The quotes look completely fine (I have looked at clearinghouses quite a bit, Russel Clark understands them...obv, the guy is not an idiot).
Which was practice a weird form of state capitalism, where most corporate profits flowed into subsidizing the political class, the military, infrastructure, and a couple of really inefficient industries.
The government, of course, was adamant that this was just a temporary transition period, and that communism would be achieved soon - like, in a few decades. This 'transition period', of course, lasted nearly 70 years.
HN is more aligned with ZH than not in the sense that it seems most on here believe the stock market is rigged or a bubble or otherwise not a sound investment.
For one thing HN doesn't allow ZeroHedge on the frontpage, it's banned from getting there. I suspect posted links to ZeroHedge get auto killed as well at this point (haven't checked lately, however it used to be the case).
It's considered a non-reputable source, filled with propaganda and comically absurd pessimism about the world ending every other day of the week (they've been wrong about the last ten years to such an extreme degree that they should shut down the entire site if they had a conscience). It also posts very pro-Russia propoganda on an almost daily basis. Their bias is interesting, although most sites have one; theirs just happens to be Russian in nature (not a great bias for an economic / business site, given Russia has no functioning market economy, a dictatorship, and has seen zero net economic growth for a decade plus).
Every great once in a while they post an article that is actually interesting, correct and outside of the normal channels of what the mainstream sites are willing to say. They publish a few of those per week, you have to dig through the trash to get to them.
It's got dutch disease, due to its oil reserves, with most of the economy focused on resource extraction (and the rest being the service sector), but that's still a market economy.
Mention the stock market and everyone screams bubble and casino on here.
I think HN shares some skepticism, but in general isn't quite as right leaning as ZH seems to be. I enjoy reading both for viewpoints along the entire political spectrum.
Just as easily as someone in software can bullshit their way through a presentation with a couple years cursory understanding of SWE topics, same goes with "researching" and writing a ZH econ article. ZH does not do meaningful economic analysis, look elsewhere.
At the end of the day, fiscal policy is extremely important, and almost no amount of monetary policy can do much on its own.
Unless we decide to start actually minting money, like the trillion dollar platinum coin idea.
Peter Thiel's hedge fund, Clarium Capital, lost huge amounts of money on such a bet.
https://www.chicagofed.org/~/media/publications/chicago-fed-...
https://www.federalreserve.gov/newsevents/files/other2019011...
Reflationary might be a better interpretation, since vast amounts of wealth were destroyed in 2008.
Earlier QE rounds (and this "not QE" round too) are definitely inflationary, but that inflation is not evenly distributed through the economy.
QE inflates prices of financial assets and related stuff. The further you get from financial assets, and the correspondingly closer you get to the real economy, the less inflation there is. Eg. equities get inflated a ton, housing prices less, the price of a hamburger not at all. The mechanism for this non-flat inflation distribution is straightforwardly derive-able just from supply-and-demand; they increase the supply of capital, but only by bidding up the prices of financial assets, while demand for those assets is approximately constant.
That said, you're right that Zerohedge ranges from "mostly-uninformed" to "intentionally writing nonsensical clickbait lies." On the other hand, it is broadly speaking not any wronger than e.g. what you see on TV or read in major newspapers.
The effects of QE become much more clear - since the price of a bond is now fixed above its market clearing price (alternately, rates are artificially pegged low), this actually results in a shortfall of supplied liquidity and a situation that sharply favors strong borrowers.
As a paranoid rag goes, ZH's faults are many and varied, but come on - the critique that the Federal Reserve doesn't know what the hell it's doing is 100% valid.
The observation that the FRB consistently bats 0.000 in economic outlook and interest rate forecasts (e.g. Bernanke calling housing subprime defaults "contained", or Yellen constantly stretching out the timeline of getting off zero, or Powell cutting rates three times in 2019 after predicting four hikes less than a year prior, or claiming repo operations would be unwound completely by 15 Jan) is absolutely correct, and an absolutely appropriate critique to make, even by armchair quarterbacks.
Just look at the history of FRB dot plots to get a view for how absurd your implied position is that bankers/economists are any better at their jobs than a drunk with darts and an interest rate chart would be.