Quantitative easing is buying financial assets at marginally above-market price with printed money in order to boost inflation and lower real wages. It's a useful policy (assuming you believe in Keynesian stimulus) because the distributional effect is close to nil, unlike fiscal stimulus or mailing money to specified individuals.
The distributional effect is small because the bank buys a bond worth $9,000 for $9,003 or so. This puts $9,003 in circulation but the person receiving $9,003 in cash receives only $3 of profit. So you've increased the money supply by $9003 but you've given the beneficiaries of QE only $3.
QE is a far more efficient way to increase inflation than fiscal stimulus since fiscal stimulus nearly always results in malinvestment/malconsumption (e.g., building bridges to nowhere, etc) and usually has highly non-stimulative side effects (raising nominal wages of government workers).
A bailout is highly targeted. Inflation is a side effect. The people receiving the money trade nothing of value in return for the money. It's totally not the same policy.
Except that we don't really see QE causing the hyperinflation many feared or the lowering of real wages. If it is intended to do these things, it is a miserable failure.
The fact is that when you dump a whole lot of money into what Steve Keen called "the slowest part of the system" it isn't going to actually have much effect. Velocity in money matters if you want the money to actually circulate.
...we are in effect getting a test of the market monetarist view right now, with the Fed having adopted more expansionary policies even as fiscal policy tightens.
http://krugman.blogs.nytimes.com/2013/04/28/monetarism-falls...
The results are in:
http://econlog.econlib.org/archives/2014/01/the_parrot_is_s....
By the criteria laid out by QE's detractors, it worked.
patio11: that is not how the Bitcoin protocol works.
Even if 99% of the Bitcoin miners agree, they cannot create extra bitcoin; it is simply impossible because that is not something that miners control. Every full node (client) on the Bitcoin network verifies the validity of each block. A block that created more bitcoins than allowed by the protocol would be rejected by the clients (and the miners who follow the original rules). The "extra" bitcoins would be on a hard fork and thus invalid to anyone on the main (original) blockchain.
More info: https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_...
If the most common bitcoin clients are updated to allow this "bonus", and at least 51% of the network installs this update, their blockchain will become the authoritative one. Older or other clients will have to accept it if they still want to participate in the chain.
A transaction that conjures Bitcoin out of nothing is certainly invalid. Patio11 got this wrong.
Transactions that make up bitcoin out of nothing are already used as rewards for mining a block.
If 51% of miners start using an inflationary version of Bitcoin "Bitcoin-QE", but the clients (exchanges, merchants, wallet providers, etc) don't approve, they won't update the client and use the partition of the network that is secured by the remaining 49% of miners. People wouldn't want to accept the Bitcoin-QE mined on the inflationary branch and the investment wouldn't pay off.
Of course Bitcoin-QE miners could start an attack on Bitcoin in other ways, but that also woudn't be necessarily economical.
It's very hard to tell what 51% will do, but it is clear that you don't have full control of the currency.
I already remarked once that Bitcoin is remarkable democratic in a way; perhaps this is a good time to leverage that...