Following on from yesterday's post on Quantitative Easing (QE) I thought I’d try and give some sense of meaning to the huge numbers banded about. Also in this post you can view the TV advert, trying to raise awareness among Americans about the scale of their national debt, which was banned by several networks
First of all, how to visualise the scale of America's QE
The problem is that when we hear that the US Federal Reserve, after the latest bout of QE is finished, will have pumped a total of $2.3trn of new money into its economy it doesn’t mean a great deal to people. But what does £2.3trn dollars actually look like?
So I decided to crunch a few numbers and put the figures into context. As I said above the US will eventually have pumped $2.3trn dollars into its economy once the second wave of QE has finished. Now if you were to print that amount of money in dollar bills and, starting in New York's Times Square, laid them all end to end where would you end up?
Just to create a bit of suspense the answer, in the form of a photo, can be found at the bottom of this article.
The advert banned on US TV
On a different note, a new television advert about the U.S. national debt which was produced by Citizens Against Government Waste has been deemed "too controversial" by a number of TV Networks including ABC and subsequently banned. Some claim that telling the truth about the country's $14trn national debt is too risky for the networks. The advert is based in the year 2030 with a Chinese professor lecturing on the fall of great empires, with the US being a case in point. But perhaps it's the closing line of the advert which is what has got the broadcasters worried. Is it too close to the truth or in danger of inciting tension against China? Either way, watch the video below, decide for yourself and post your comments at the bottom of this article.
The answer to the $2.3trn dollar question
The answer to the earlier question is that if you laid the dollar bills end to end, starting in New York, you'd end up here:
Mars! (or at least 90% of the way there). Alternatively you could have gone to the moon and back, not once, not twice but 475 times!
As for the size of the US national debt (nearly $14trn) if you did the same exercise you could go to Jupiter and back, and then some.
But what about the UK's own £200billion QE programme? Well I'll leave it up to you to work out what this amount of money looks like.