A great critique of quantitative easing from credit expert David Goldman:
Quantitative easing, once again, won’t create economic growth. It will just reprice assets. In the Keynesian model, it is supposed to drive money out of safe-haven refuges (which have a negative real return) and into brick-and-mortar and, presumably job creation. What it does, in fact, is turn gold into a safe haven, and force an increase in the savings rate! That’s because prospective pensioners who thought they could retire with a 7% annuity are looking at a 4% annuity instead. They simply have to save more, and that’s bad for consumption. The cost of money isn’t the main obstacle to job creation. Obamacare and associated regulatory burdens are the big problem.
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