[/caption]Before our times, when medicine was not too far advanced, the so called doctors at that time tried to cure their patients with bloodletting. That it did not work was completely besides the point. It looked impressive. This quantitative easing looks like something similar to bloodletting.
Matthew Lynn recently wrote on Bloomberg News:
"The situation is only going to get worse. There is no persuasive evidence that quantitative easing, also known as QE, has done anything other than boost asset prices. And the emergency that prompted the need to ease is over: The economy is in good enough shape, thanks to the depreciation of the pound and low borrowing costs, to make restraining prices a top priority once again."
Yes, quantitative easing does have an effect. It fills the coffers with money that can be wasted. But aside from that, printing money simply destroys the economy.
There is no need to manipulate the money flow.
Many people have a lot of opinions, but so far I have not meet anybody who could conclusively explain to me why we need inflation. Yes, there are many people working on our finance systems and yes there are a lot of companies that make money with this. But other than keeping people busy, inflation does not fulfill any purpose. Only because it is possible to create inflation does not mean that it is good.
Ben Bernarke will probably tell a different story tomorrow. Whether he believes it or whether he just has to follow orders is a different story.
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