They’ve a new report out, the Murphaloon and Colin Hines:
These QE programmes had two goals. First they were intended to provide liquidity to the world’s
major financial markets by injecting additional cash into them as a result of bond purchases from
major market participants. Second, it was expected that those market participants would then use
that liquidity to invest in the wider economies of the countries concerned. That was meant to both
provide an economic stimulus and avoid the onset of deflation, which looked likely.
The huge sums involved have, however, been predominantly invested in assets such as the stock
market and property, thus concentrating the benefits amongst the financial community and
wealthier parts of the societies. The proceeds from selling such bonds do not appear to have trickled
down enough to help kick-start the real economy in any of the countries involved, and the track
record on avoiding deflation has also been partial, at best.
Nope, the aim was to get investors to move out along the risk curve so as to reduce long term interest rates. That’s what has happened, QE has worked as designed.
Seriously, and I say this candidly as neoliberal sophistry, if you’re going to talk about QE it really does help if you first understand QE.
And they’ve entirely, as usual, missed the point that QE is designed to be reversible. All they’re really suggesting, with their non-reversibility, is printing money to spend. Which does have, it’s got to be said, something of a rocky track record.