When Even "Erudite" Economists And Journalists Blast QE

Tyler Durden's picture

Are you saying it took the highbrow economist cadre five years to figure out and agree with what we first said in 2009, and for which we received endless ridicule, abuse and accusations of fringe insanity? Yes. We are saying that.

First, from the "erudite" economists at the IMF, and its just released report titled "Monetary Policy in the New Normal":

Should unconventional policy tools become conventional? During the crisis, central banks employed unconventional tools (such as bond purchases and forward guidance) to provide economic stimulus as the policy rate approached zero, and to ensure transmission despite disrupted financial markets. This raises the question of whether unconventional tools should also be used in tranquil times. We conclude that with the exception of forward guidance, the costs seem to exceed the benefits.

And then, from the "erudite" journalists at The Economist:

When QE was first announced, it was the equivalent of emergency surgery. Then, further rounds were needed to help the economic patient recover. The third step was for the Bank of England to hand back to the Treasury the interest it earned on government bonds, in the name of good accounting. And now what was originally a temporary arrangement has been turned into something more permanent.


All along, the authorities have denied that this process represents “monetisation” (the monetary financing of government debt), which is something of a taboo in central banking. But the cumulative impact is similar. The British government has in effect ended up with an interest-free loan from its central bank, financed by money creation. The debt has not been formally cancelled, but it might as well have been.


[A]nother reason why monetisation has always been frowned upon is that it is an easy option. Why should governments finance spending with unpopular taxes or borrow from suspicious bond investors when they can get the money from a friendly central bank? The process makes democratic leaders less accountable; by boosting asset prices, which are mostly owned by the rich, it may well have led to a rise in inequality, without the sanction of any vote. Perhaps in ten or 20 years’ time, recent events will be seen as the moment the world crossed a line.

Wait a minute, that is what we said five years ago!

So, based on the preceding, all we can conclude is: "Those damn tinfoil-hat, conspiratorial, fringe bloggers at the IMF and the Economist."

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buzzsaw99's picture

friendly central bank? no such thing. bankers are parasites.

smithcreek's picture

Unconventional tools?  They flatter themselves.  They are all a bunch of conventional, standard, every day, run of the mill, plain old tools.

knukles's picture

That's because (the erudite blasting QE, finally) everybody's become embarrassed by Paul Krugman and nobody wants to be seen in the same room with him... er something like that.


PS  Excessive QE is like toilet papering over turds.  A sticky situation demanding lots of Shitgum

Stackers's picture

I noticed how they left the biggest taboo with debt monetisation --- hyperinflation and a complete collapse of the currency.

Headbanger's picture

To answer Tyler(s)'s question..


GetZeeGold's picture



When I told my grandkids what they were doing....boy were they pissed!

BandGap's picture

"What were once vices are now habits".


replaceme's picture

Crocodiles are friendly, too.  Nice crocodile, nice.

BLOTTO's picture

Erudites and Edomites...oh my.

kaiserhoff's picture

Barracuda smile.  They are glad to see you;)

petolo's picture

Old African aphorism : Don't insult  the crocodile till you have crossed the river.

Cpl Hicks's picture

Somebody give this loser in a Raiders tee a big hot cup of STFU.

QE is for the winners in this world.

yrbmegr's picture

October will be interesting.

ArkansasAngie's picture

I hope it gets interesting long before October.  In part, because then November will be even more interesting.

Leave no incumbent in office.


nickels's picture

The incumbent is dead. Long live the incumbent. Let's fix one "broke" thing and make banking a utility.

petolo's picture

Pitchforks, shovels, hempen rope, guilotinnes ready to go General Durden!

toys for tits's picture

When Krugman capitulates the apocalypse begins.

CHX's picture

Sell in May, get some gold, and come back in about 10-20 years.

BandGap's picture

He'll use big words so we'll think he's smart.

He'll jump when he's close to the boats, not before.

Mercury's picture

And now what was originally a temporary arrangement has been turned into something more permanent.

Just wait until they realize that there can be no permanent, stable equilibrium with constant market manipulation, pervasive central planning and private wealth destruction.


ArkansasAngie's picture

I'm counting on them learning that one the hard way ... by letting the door smack'em in the arse on their way out to stand in the soup kitchen line.

Let's have some moral hazard wealth redistribution.  Those that fail has to liquidate to those who have not.

Rainman's picture

  Clusterfuck, noun, (military origin)

  A bungled or botched undertaking ; A situation, state of affairs or gathering that is disorganized or chaotic.

yogibear's picture

Anytime they announce reducing QE the market responds by dropping.

The Fed will eventually get scared, reverse and pump in even greater QE.

It won't stop until everyone is fleeing the US dollar.

ugmug's picture

BlogHeads United .....the football team for tinfoil-hat, conspiratorial, fringe bloggers....

zorba THE GREEK's picture

Zero Hedge may have been right about QE, but I still think the World is flat.

knukles's picture

Would you like to go to a testicular cancer survivor meeting with me?

Uncle Remus's picture

Marla will be there - well, so I hear.

y3maxx's picture

...and Earth is the Centre of our Universe...wait a minute...and is the "Council for Foreign Relations" the Centre of our Planet?...

BLOTTO's picture

'They' think our Sun is at the centre of the Universe...hence why they worship it.

Cattender's picture

so simple to understand. yet these phd holders just don't seem to get it..

H. Perowne's picture

There are levels of human stupidity only attainable by intellectuals. The rest of us poor tyros can only dream.

buzzsaw99's picture

that's like saying a monkey wrench doesn't get it

Cheyenne's picture

"And now what was originally a temporary arrangement has been turned into something more permanent."

No shit, Sherlock. That's because the mega-bank house of mirrors is one huge ongoing control meta-fraud in which member institutions are themselves bankrupt--which is another "fringe" position that zh took 5 years ago and that happens to be true as well. Must we really wait until 2019 for the legacy media to wake up to this reality?

Seasmoke's picture

Perhaps. But every day we get one day closer to 2019. That's the thing about time. 

NoDebt's picture

I think it's become "fashionable" to poo-poo QE and such now that the Fed is tapering (remember- never fight the Fed, not even in your stated opinions).  The next down-turn in the economy or the next "banking crisis" they'll be right back at it, though, and everyone will agree it's a good thing (again).

orangedrinkandchips's picture

fringe insanity? Lunatic fringe......Theme song for ZH!!!!!


Try this.....http://www.youtube.com/watch?v=IK-nVzp5NbE

Peter Pan's picture

You can fiddle with the level of asset prices but when unfunded liabilities continue to mount then it is really quite clear that QE has provided only a veneer of success while the unsustainability mounts.

larry david's picture

The IMF and Economist finally caught up to ZH? Wasn't April Fool's last Tuesday???

agstacks's picture

I'm surprised they didn't throw in, "and until this very report was released, no one, we mean NO ONE, knew that QE was a net negative. We were the first to make this breakthrough discovery."

inky's picture


lol that ones probably coming next.

But we at ZEROHEDGE know different.

larry david's picture

Next thing you know the Wall St Journal will run a piece touting physical gold as high quality capital that boasts 0 counterparty risk. 

Dr. Engali's picture

Once the financial markets start to collapse due to the lack of stimulus they will be singing another tune. We have seen the damage that tapering is doing. Just wait until Qe is completely withdrawn (if ever). They will be screaming like little bitches.

Uncle Remus's picture

."hey what's that sound
everybody look what's goin down"

Wait What's picture

QE will never be 'wound down'. the rate of growth might reach zero (not likely either) but they'll still be buying TSYs to maintain the 5 trillion.

rats that 1st jump ship from the 'QE is good' boat jump best, which is why the FOMC has so many vacancies for its governorships. expect to see more of this as the lie that 'QE is good' gets further exposed as such, as well as a gift to old wealth that does nothing but move paper around looking for interest and dividends.

Lagarde is already whining about the damage tapering is doing to the global economy, it will soon become a cacophony as everyone realizes the liquidity trap is real. but they'll keep screaming the same lunacy:



kudos to TD for enlightening the world long before people were ready to acknowledge QE Fail.

thegekko's picture

And that's just part of the reason why ZH is the best financial website in the world. Your track record speaks for itself and I sincerely hope that one day ZH gets recognition for(hopefully) helping change the landscape & culture of global financial sector. Who knows, maybe one day we'll see all the Tyler's on the cover of Time magazine as man(or people) of the year. One thing's for sure, like most ZH followers I'd just love to know who you are, your professional backgrounds, your level of education, and your impeccable sources.

knukles's picture

That'd kinda be like knowing God's plan. 

toys for tits's picture

If only there was some website, magazine, or newsletter that God published. Maybe it's this one.

Wait What's picture

if i'm not mistaken, i believe the plan is called Project Mayhem