An architect of the ‘printing money’ fix turns into a QE critic

 An architect of the ‘printing money’ fix turns into a QE critic

Last year, as the gravity of the threat of the pandemic became clear, the major central banks – which still had QE programs running – expanded them aggressively in tandem with unprecedented levels of fiscal stimulus from their governments in response to what was a more conventional threat of a severe economic downturn, albeit one that had emerged from an unconventional source.

Even the RBA, which had avoided using QE during the financial crisis and was somewhat sceptical of its efficacy, was forced to follow suit because, by driving their interest rates down and flooding their systems with ultra-cheap funds, the major central banks threatened to force the currencies of countries with higher interest rates up sharply, exaggerating the depressive impact of the pandemic.

QE has done little, if anything, for investment and growth rates.

The House of Lord’s committee concluded that the UK’s QE in 2009 had been effective in…

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