gryffron wrote: QE is a direct, immediate and unavoidable tax on money (whether physical cash or virtual savings in the bank). It works by diluting all the existing cash in the country, and giving the govt the surplus.
And who owns the money, if not the citizens? Because the government don't, instead they spend it 'on behalf of the taxpayers'. So the citizens pay, via the government, by having their assets diluted in worth.
gryffron wrote:Imagine you start with a barrel of wine, and add a pint of water. You now have just >1 barrel of watered down wine, of which the original owners keep their barrel and the govt keeps the new pint. As long as you keep watering it down slowly enough, the original owners never notice that you are siphoning some off (regardless of whether we are talking about wine, or the value of money).
Well precisely, the citizen's assets are diluted in value, and the government scoop off their cut, at the citizens' cost. But then your illustration relies upon 'the citizens not noticing', which is sadly also my point; the citizenry pays and the government relies upon them not noticing.
And hence what you see in Italy. Germany has green-lighted the Italian government pulling this trick on it's citizens; how very convenient for them.