QE Forever and Ever?
The Extraordinary Becomes Normal
by Pater Tenebrarum
Acting Man
The lunatics are running the asylum. This is the only conclusion one can come to when considering the nonchalance with which what was once considered an extraordinary policy with a firm ‘exit’ in mind is now propagated as a perfectly normal ‘tool’ to be employed at the drop of a hat.
We refer of course to so-called ‘quantitative easing’ (QE), which really is a euphemism for money printing – even if not necessarily all of the central bank credit created ends up as part of the money supply. In fact, the experience of the Bank of Japan and the Bank of England with ‘QE’ was and is that it simply increases excess reserves and depresses already low interest rates a little further. Such excess reserves may be regarded as the tinder for an inflationary expansion of the money supply, but as long as no new credit is pyramided atop them, they may as well not exist.
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2012-08-08 14:41:52
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