Quantifying the Quantitative, or Making Easy the Easing
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 16 July 2021
⏱️ 31 minutes
🧾️ Download transcript
Summary
Like most of you, before the financial crisis, I had never heard the term or uttered the term “quantitative easing.” This somehow becomes completely standard fare in the lexicon of finance in the last 13 years, and it is now uttered by people who I am 1,000% positive do not know what it is dozens of times per day in the media. There is nothing wrong with not understanding the obscure vocabulary of monetary economics unless of course, you are sitting around using the obscure vocabulary of monetary economics. But words have meaning, and today we’ll look at some of these words.
But we will do more than define words today. After all, you deserve to get your money’s worth for what you pay for this Dividend Cafe subscription!
My goal today is to walk you through the history of quantitative easing, explain what policy goal it is serving, what policy goals it is not serving, and what it means to you as an investor. By the time you are done with this read, I believe you will be a QE expert. And I assure you, as a fellow QE expert, nothing makes you more popular at parties than knowing the deep dive of quantitative easing! It’s a good thing I’m married …
Okay, QE and why you should care, in this week’s Dividend Cafe!
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.5 | Hello and welcome to another week of the Dividend Cafe podcast. |
| 0:17.3 | And those of you watch on video, I am sitting in the New York office studio and pretty excited to |
| 0:24.3 | talk to you about today's topic, which is quantitative easing. |
| 0:30.1 | And just before we began this recording, I was talking to my wife on the phone and I told her |
| 0:36.0 | what I wrote Diven Cafe about this morning and I was |
| 0:40.4 | really clear in her voice that she was pretty excited about it and I expect that you guys are |
| 0:44.8 | going to be equally excited. The sarcasm is based on the fact that quantity of using may be |
| 0:51.1 | one of the most boring subjects known to mankind for regular people who have lives. |
| 0:58.0 | I'm not a regular person and I don't have much of a life outside of all this. |
| 1:02.7 | But the reality is that quantitative easing in financial media right now may give one the impression is the only thing that's happened in the whole entire economy. |
| 1:14.5 | QE, as it is called for shorthand, is a big topic in monetary economics. |
| 1:21.4 | It's a big topic in investment finance. |
| 1:24.3 | And there's a reason why I want to address this topic. |
| 1:29.1 | And there is a sort of once and for all kind of vibe going on here. |
| 1:34.4 | Like I want to cover this today in a way that we'll cover it once and for all because the media will keep the topic going. |
| 1:41.7 | The topic does have real currency in actual Fed activity |
| 1:46.0 | and in a policy framework into the future. It's kind of embedded into this part of national |
| 1:53.7 | economic planning since the financial crisis. And yet I want the once and for all to be how we think about it as investors and in my |
| 2:05.0 | case as investment managers at the Bonson Group. So I'm going to try to explain it a little unpack |
| 2:12.2 | it and then give you kind of my own commentary, both from a policy standpoint, you know, |
| 2:18.8 | if I could be not king for a day, but Fed governor for a day, what's the difference |
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