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As European Central Bank Is Set to Unleash a Massive Round of Quantitative Easing, Central Bank Heads Admit QE Doesn’t Work
The former head of the Bank of England – Mervyn King – said yesterday that more QE will not help the economy:
We have had the biggest monetary stimulus that the world must have ever seen, and we still have not solved the problem of weak demand. The idea that monetary stimulus after six years … is the answer doesn’t seem (right) to me.
Also yesterday, William White – the brilliant economist who called the 2008 crisis well ahead of time, who is head of the OECD’s Review Committee and was former chief economist for BIS (the central banks’ central bank) slammed QE:
QE is not going to help at all. Europe has far greater reliance than the US on small and medium-sized companies (SMEs) and they get their money from banks, not from the bond market.
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Even after the stress tests the banks are still in ‘hunkering down mode’. They are not lending to small firms for a variety of reasons. The interest rate differential is still going up.
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Mr White said QE is a disguised form of competitive devaluation. “The Japanese are now doing it as well but nobody can complain because the US started it,” he said.
“There is a significant risk that this is going to end badly because the Bank of Japan is funding 40pc of all government spending. This could end in high inflation, perhaps even hyperinflation.
“The emerging markets got on the bandwagon by resisting upward pressure on their currencies and building up enormous foreign exchange reserves. The wrinkle this time is that corporations in these countries – especially in Asia and Latin America – have borrowed $6 trillion in US dollars, often through offshore centres. That is going to create a huge currency mismatch problem as US rates rise and the dollar goes back up.”
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He deplores the rush to QE as an “unthinking fashion”. Those who argue that the US and the UK are growing faster than Europe because they carried out QE early are confusing “correlation with causality”. The Anglo-Saxon pioneers have yet to pay the price.
“It ain’t over until the fat lady sings. There are serious side-effects building up and we don’t know what will happen when they try to reverse what they have done.”
The painful irony is that central banks may have brought about exactly what they most feared by trying to keep growth buoyant at all costs, he argues, and not allowing productivity gains to drive down prices gently as occurred in episodes of the 19th century. “They have created so much debt that they may have turned a good deflation into a bad deflation after all.”
The former long-term head of the Federal Reserve (Alan Greenspan) says that QE has failed to help the economy.
The original inventor of QE agrees.
Numerous academic studies confirm this. And see this.
Indeed, many high-level economists – including Federal Reserve economists and the main architect of Japan’s QE program – now say that QE may cause deflation and harms the economy in the long run.
Economists also note that QE helps the rich … but hurts the little guy. QE is one of the main causes of inequality (and see this and this). And economists now admit that runaway inequality cripples the economy. So QE indirectly hurts the economy by fueling runaway inequality.
A high-level Federal Reserve official says QE is “the greatest backdoor Wall Street bailout of all time”. And the “Godfather” of Japan’s monetary policy admits that it “is a Ponzi game”.
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... D'uh ...
OF COURSE:
Vastly more fraud pumped into fundamentally fraudulent financial accounting systems does not work!
The ONLY thing which could theoretically work is more radical truth about the ways that money is measurement backed by murder. However, the established systems are based on a long history of successful death controls based on the maximum possible deceits becoming the foundation for financial systems based on government enforced frauds.
It is NOT possible to stop measurement from existing. It is NOT possible to stop murder from existing. Therefore, it is NOT possible to stop money being the oxygen of political fires, or the mother's milk of politics. That has enabled the best organized gangs of criminals to capture control over the powers of governments, thereby transforming governments into the biggest form of organized crime, through a monetary system which has become like a totally metastasized cancer, or a parasite which is killing its host.
We now live in a Bizarro Mirror World, where everything appears proportionately backwards, or a Wonderland Matrix, where everything appears absurd. "Money" is made out of nothing as debts, by privately controlled banks, while that fraud is enforced by governments, primarily through demanding payment of taxes in that fiat, faith-based "money." The more one learns about that, the worse it gets!!! That situation could not be more backwards and absurd, EXCEPT that it can readily be understood as the result of the prolonged, persistent, application of the methods of organized crime to the political processes.
http://www.conspiracyarchive.com/NWO/silent_weapons_quiet_wars.htm
Silent Weapons for Quiet Wars
… Energy is recognized as the key to all activity on earth. Natural science is the study of the sources and control of natural energy, and social science, theoretically expressed as economics, is the study of the sources and control of social energy. Both are bookkeeping systems: mathematics. Therefore, mathematics is the primary energy science. And the bookkeeper can be king if the public can be kept ignorant of the methodology of the bookkeeping. … In this structure, credit, presented as a pure element called “currency,” has the appearance of capital, but is in effect negative capital. Hence, it has the appearance of service, but is in fact, indebtedness or debt. … if balanced in no other way, will be balanced by the negation of population (war, genocide)… They must eventually resort to war to balance the account, because war ultimately is merely the act of destroying the creditor … War is therefore the balancing of the system by killing the true creditors (the public …)
The ONLY theoretically sufficient solutions must be based on understanding the real problems, that money is necessarily measurement backed by murder. Therefore, the ONLY way to change the monetary system is to change the murder system that backs that up. However, since the debt controls depend upon the death controls, the situation in which the existing debt slavery systems have generated numbers which have become debt insanities (where the banksters' "solutions" are to make MOAR "MONEY" OUT OF NOTHING, thereby creating even BIGGER DEBT INSANITIES), most probable outcomes are for that to be finally resolved by provoking death insanities.
The basic FACTS are that human beings and civilizations manifest as general energy systems engaged in entropic pumping, which are necessarily systems of organized lies, operating robberies, which follow the principles and methods of organized crime. However, human history has selected for that to have the most social success when done through the maximum possible deceits and frauds. Therefore, the established systems are that the biggest gangsters, the international banksters, control governments, as the biggest form of organized crime.
Since it is practically impossible for anyone within the established systems, including their controlled opposition groups, to understand human beings and their civilizations in genuinely more scientific ways, because that would require facing the FACTS that there are fundamentally fraudulent financial accounting systems controlling civilization, the actual "solutions" promoted by the banksters are more FRAUDS, which continue to be ENFORCED by governments.
OF COURSE, OVERALL, THAT DOES NOT WORK!
Since the history of civilization has been based on being able to back up lies with violence, which became the established systems of legalized lies, backed by legalized violence, that history has resulted in the biggest bullies' bullshit being built into the basic structure of the dominate natural languages, as well as into the dominate philosophy of science. Hence, it is NOT possible to exaggerate the degree to which our civilization operates on the basis of the maximum possible deceits and frauds.
The ONLY connection between human laws and natural laws is the ability to back up lies with violence. Although human beings and civilizations DO operate according to the laws of nature, as general energy systems, the ways that we understand the concept of entropy are totally backwards, as the most abstract way that we generally are understanding everything backwards, because of the degree to which the biggest bullies' bullshit dominates the languages that we use, and therefore, the basic ways that we think. Therefore, not only are the established systems proportionately backwards and absurd (and so, their "solutions" make their problems overall become worse, faster), but also, the controlled opposition to those established systems stays within the same bullshit frame of reference, when proposing their various kinds of bogus "solutions" based on going backward to their favourite old-fashioned religions or ideologies.
In FACT, we are headed towards the runaway debt insanities provoking death insanities. Therefore, the only genuinely realistic resolutions of those runaway political problems are to, perhaps, survive those death insanities ??? We might be able to steer those death insanities into becoming better death control systems, backing up better debt controls. ... however, I would not count on that actually happening ... While it is theoretically possible that human beings could understand themselves and their civilization better, so that they could resolve their chronic political problems better, the real world of politics is so totally dominated by bullshit that it would take a prodigious series of political miracles for that to happen, while defaulting to business as usual will automatically drive the existing debt slavery systems to become even worse debt insanities, which have no other realistic resolutions than through death insanity situations.
Meanwhile, as far as I can tell, I am wasting my time attempting to promote the kinds of political science fiction in which one presumes that human beings become more scientific about themselves, especially since the currently established dominate scientific communities, and their controlled opposition groups, are just as much drowning in their own kinds of bullshit as are every other social system. Theoretically, we would have to go through intellectual scientific revolutions, enough to be able to understand how the political economy operates as the manifestation of a general energy system engaged in entropic pumping, in order to better resolve our problems in those regards. However, the degree to which those systems are already based on the maximum possible deceits and frauds, which world views are shared just as much by their controlled opposition groups, promoting any more radical truths about that certainly looks like a pointless and quixotic thing to bother to do ...
They know it doesnt work. It is wealth transfer 101 with no opposition.
WOW ! This imposter of America's sacred founder has demonstrated that he (?) is capable of writing something relevant and useful - I am impressed. But one article does not make a trend.
WE ALL should be happy the time these GAMES have afforded thosse of us that know how this will end to get our affairs in order...if there is any benefit to the QE game, it is this. 92% of the world will be shocked when the Depression comes.
Doesn't matter if QE euro style helps or not. Draghi has no authority to do this.
Draghi needs Merkel and Merkel has made it clear that German taxpayers will not pay the bills for such a scheme.
So it's more austerity for the windbags like Draghi and his followers.
The USG - World's Uber Ponzi
7 billion people need good management . Tragic what greed and power lead to, we shall see.
http://www.washingtonsblog.com/2013/04/big-banks-attempt-secret-coup-aga...
Printing money is not the same as creating wealth, something that only human work and ingenuity can do. All that more money will do is distort the money price of some class of assets.
But this is not an academic exercise, for when government spends the newly created money, it gets to buy things, pay off people and hire more bureaucrats. Money printing is theft of private wealth by dilution.
The stupidity of the QE is that the proof of their policy's success is that its opponents must prove that it doesn't work. You cannot prove the negative. Where is the positive proof that QE works? Hope, desire, consensus, or wishful thinking are not proof.
Did blood letting save General Washington? Why should we trust Central Bankers, when they have already failed to avoid the present situation? What economic authority taught Bernanke about QE? If five Central Bankers do QE does that make it work?
The great economic heresy is that Central Bankers are omnipotent or even potent.
No more QE, next time they will just steal the money right from your Bank account, cuts out the middle man, its called a Bail in and the legislation to do it is already in place.
Work: No.
Buy time: Yes.
Buy time for what is the scary question.
buy time for lots. EUROPE, CRUDE maybe, energy sector bottoming.
But here is my biggest tip for 2015. BIOTECH! yes, as shitty as it might sound, thre are huge rapid changes coming, so why not make some money from it. It outperformed last year in 2014.
BIOTECH – CHART here==>http://bit.ly/1fMcakI
I made a fortune on biotech last year, but this year could be better.
The .1% are quite happy with QE
"We have had the biggest monetary stimulus that the world must have ever seen, and we still have not solved the problem of weak demand. The idea that monetary stimulus after six years … is the answer doesn’t seem (right) to me."
Is King daft? He is conflating monetary policy with a fiscal outcome. QE is monetary policy. Stupid monetary policy, but monetary policy nonetheless. It is true that part of the QE history of the Fed (was it QE1 or QE2, I can't keep track?) included the purchase of U.S. Treasury notes to support deficit spending - the Obama stimulus. But by and large it was a gift to the banks and the global financial system. Illiquid (and very likely distressed) bonds were freaking purchased by the Fed at par. The banks were stuffed with new FRNs and the Fed was simply stuffed. The banks parked much of their loot at the Fed itself, the rest went into proprietary trading, M&A and the like. Very little made its way into the real economy (car loans and student loans are the exception). Speaking of inflation - anyone notice the near tripling of equities under this program? That was a feature, not a bug.
Too many folks have termed QE as Keynesian. BS. The Keynesian approach would have been sky-high fiscal deficits (trillion dollar coin, anyone?) full employment, growth, and high demand. And a good bit of inflation. QE is theft. Its a theft of value. A transfer of wealth upward. When the multi-billionaires who raked in the QE spend their ill-gotten loot - it is your labor they will be buying with what should be YOUR money.
Of course, when the margin calls come while the market is crashing (damned near certain to happen) TPTB will once again play Captain Renault.https://www.youtube.com/watch?v=SjbPi00k_ME
The next financial crises will not be televised. With taxpayer protection for derivatives now established, and the collapse of oil-based derivatives, the FED will send money out the back door. You will eventually see it in inflation.
crackheads allways runs out of crack.
rehab then spiritualy or they die.
Charlie Sheen doesnt run out
what is the end game? punt with new currency and whole lota chaos.
So, If QE does not work, why do it? Buying time? for bankers, politicians?
What is the end game?
So we're expecting the same guys that got us into this mess to be thought leaders on how to get us out of it?
Here's a better idea: hand out some consequences - starting with life sentences and/or death penalties.
Or do they prefer beheadings?
"ISIS, call 1200"
Nailguns are popular right now....
Doesn't work for who? Works extremely well for insolvent banks and spendthrift politicians. This is a fake recant.
What else can they do?
Tell the truth?
Cause their bankster masters some misery?
They skipped sending everyone 500 euros to spend first.
They don't even know what truth looks like anymore and as for this magic QE, this is Draghi making more noise. Until the money is put on the table it doesn't exist and the way they are talking about doing it is going to make the small countries even madder than they are now.
File this one under this "Ministry" take two lithium with a morphine drip
JHC but we are over ripe for something totally catastrophic happening when you know and understand the contradictions of those in control in that ironic statement and the pathetic sheeple just keep looking on...
There's no expectation QE will work. The emperors allknow that. They're prepping for the US to be on its back so the Amero and membership in the NAU will be offered as their "Savior".
Greenspan meant to say that he did not help the economy
QE works just fine for the super rich. The poor get screwed to death, but who cares about good Christians?
Exactly. QE works great. They just can't admit who benefits from it since that would pretty much let the cat out of the bag.