[Stevo]

Hi Ash,
I wonder if an effect of the seemingly large QE and LTRO of the US and Europe is to dilute and thereby proportionately reduce in value the current store of money/assets held by banks? If these additioons to the shrinking money supply do not go outside the banks then they have no inflationary effect.on the cost of general goods and services. But the impact is still inflationary on money wealth. The owners of the existing stock of money are thereby effectively paying the costs of propping up the private banking system, so it can still fund the roll-over of sovereign debt??

[Author]

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