My answer: Federal Reserve (United States Central Bank) Prints more money.
(See my earlier posts about the federal reserve, what it is and how it works)
More complicated answer:
A quick refresher from Wikipedia, in case you're not quite sure but don't want to sound dumb by asking...
Quantitative Easing
The term quantitative easing (QE) describes a form of monetary policy used by central banks to increase the supply of money in an economy when the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero.
A central bank does this by first crediting its own account with money it has created ex nihilo ("out of nothing").[1] It then purchases financial assets, including government bonds and corporate bonds, from banks and other financial institutions in a process referred to as open market operations. The purchases, by way of account deposits, give banks the excess reserves required for them to create new money by the process of deposit multiplication from increased lending in the fractional reserve banking system. The increase in the money supply thus stimulates the economy. Risks include the policy being more effective than intended, spurring hyperinflation, or the risk of not being effective enough, if banks opt simply to pocket the additional cash in order to increase their capital reserves in a climate of increasing defaults in their present loan portfolio.[1]
Just bear in mind that whenever this occurs the value of the currency is diluted, devalued, made to be worth less than it was, is not able to buy the same amount for the same price as before.
That's called INFLATION! So, is quantitative easing good? And if so for whom? YOU TELL ME!
NOTE: All of the currency in circulation in the country is called
Read more: http://articles.businessinsider.com/2010-08-09/news/30063162_1_central-bank-money-supply-financial-institutions#ixzz1jYKjjjo0
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