So I just finished creating this diagram showing what Quantitative Easing and Monetary Easing is and more generally how new money is created and put into circulation, thus increasing the money supply.
To which practice are you refering to? All money creation, QE, ME, discount rate adjustment, reserve rate adjusement? I touch on several methods that all increase money supply so you have to be more specific.
I am posting ina few minutes a much improved version of the chart, it may make it clearer.
Monetary easing massively increases demand for bonds by govt purchases, and thus raises their price which lowers their yield. Quantitative easing, according to your chart, massively increases government investment in the stock market, raising prices by increasing demand. Both monetary, and quantitative easing suppress the yield on bonds and reward investment in the more volatile stock market. So bonds languish as a viable investment whereas stocks rise.
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