Everyone here can understand dilution in the context of a VC termsheet. Printing $600 billion has much the same effect: it dilutes down all other holders of currency by increasing the US government's share. QE is thus basically a massive tax -- it does not increase the real productive capacity of the economy, but puts ever more of it in government hands to allocate as they see fit.
Whether you think this is a good thing depends on whether you subscribe to Hayek or Keynes.
Comments
Everyone here can understand dilution in the context of a VC termsheet. Printing $600 billion has much the same effect: it dilutes down all other holders of currency by increasing the US government's share. QE is thus basically a massive tax -- it does not increase the real productive capacity of the economy, but puts ever more of it in government hands to allocate as they see fit.
Whether you think this is a good thing depends on whether you subscribe to Hayek or Keynes.