How does Quantitative Easing affect retirees?

QE devalues savings by increasing the money supply. When the Fed creates trillions of new dollars, each existing dollar buys less. Retirees on fixed incomes see their purchasing power decline even as their account balance stays the same.

TrustWire Global ← Back to Glossary

What is Quantitative Easing?

Q: What is Quantitative Easing?

Quantitative Easing (QE) is a monetary policy where central banks create new money electronically to purchase government bonds and other securities. This increases the money supply, lowering interest rates but diluting the value of existing dollars in circulation.

Money Printing & Its Impact on Your Savings

Quick Definition

Quantitative Easing (QE) is a monetary policy where central banks create new money electronically to purchase government bonds and other securities. This increases the money supply, lowering interest rates but diluting the value of existing dollars in circulation.

Why Retirees Should Care

If you saved $500,000 for retirement, that number stays the same in your account. But after multiple rounds of QE, each dollar buys less. Your account balance is unchanged, but your purchasing power has been quietly stolen.

The QE Track Record:

2008-2014 (QE1, QE2, QE3): Fed created $3.7 trillion
2020-2022 (COVID QE): Fed created $4.8 trillion in 18 months
Total since 2008: $8.5+ trillion created from nothing

How QE Works (The Mechanics)

Fed creates money electronically (literally types numbers into a computer—no printing press required).
Buys government bonds from banks, injecting cash into the financial system.
Banks receive cash, which they use to make loans or buy assets (stocks, real estate).
Asset prices inflate, benefiting those who own assets (wealthy).
Dollar value declines, hurting those holding cash (retirees).

Translation for Retirees:

QE is a wealth transfer from savers to asset owners. If your retirement is in cash or bonds, you lose purchasing power. If it's in hard assets (gold, real estate), you're hedged.

The Inflation Connection

The Fed claims QE doesn't cause inflation because they measure "CPI"—an index that ignores housing, healthcare, and education costs (the things retirees spend money on).

Reality: When you increase the money supply by 40% in 18 months (2020-2021), prices rise. Not immediately, but inevitably.

The Math:

If the money supply increases 40%, and goods/services production increases 3%, basic economics says prices rise ~37%.

Your $500,000 retirement fund now has the purchasing power of ~$315,000. $185,000 stolen—without a single withdrawal.

"But the Fed Stopped QE..."

Technically yes. The Fed moved to "Quantitative Tightening" (QT) in 2022—selling bonds to reduce the balance sheet.

But here's the trap: The damage is already done. The $8.5 trillion already created still exists. Reversing QE requires destroying money (deflationary collapse), which causes recessions. Politically impossible.

Defensive Positioning

You can't stop the Fed from printing. But you can own assets they can't dilute.

Gold supply increases ~1.5% per year (new mining). Dollar supply increased 40% in 18 months. This isn't speculation—it's arithmetic.

View Gold IRA Research →