Here’s Richard Koo’s New Blistering Presentation On Why QE2 Has Been A Disaster

Richard Koo

Monetary policy has failed alone to lift the U.S. economy, because the private sector is obsessed with minimising debt, according to Nomura Chief Economist Richard Ko.

Speaking this weekend at George Soros’ Institute for New Economic Thinking conference at Bretton Woods, Koo outlined why the U.S. and Europe have missed the lessons of the Japanese experience.

Koo’s presentation explains how the U.S and Europe have expanded their monetary base, but that this flood of cash isn’t driving economic growth because banks, businesses, and people are paying down debt. Koo says that only the government can step in to spend the excess savings in the market.

[slideshow]
[slide
permalink=”-1″
title=””
content=””
image=”http://static.businessinsider.com/image/4da2f8b24bd7c810400f0000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”the-us-housing-market-resembles-that-of-japans-2″
title=”The U.S. housing market resembles that of Japan’s”
content=””
image=”http://static.businessinsider.com/image/4da2f8b8ccd1d5452e2a0000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”cutting-rate-to-zero-has-not-cured-the-unemployment-crisis-3″
title=”Cutting rate to zero has not cured the unemployment crisis”
content=””
image=”http://static.businessinsider.com/image/4da2f8beccd1d53d30290000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”quantitative-easing-programs-and-policy-easing-is-not-increased-the-us-money-supply-4″
title=”Quantitative easing programs and policy easing is not increased the U.S. money supply”
content=””
image=”http://static.businessinsider.com/image/4da2f8c4cadcbbd33b0a0000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”and-it-hasnt-worked-in-the-eu-either-5″
title=”And it hasn’t worked in the EU either”
content=””
image=”http://static.businessinsider.com/image/4da2f8ca49e2ae1526120000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”nor-has-it-worked-in-the-uk-6″
title=”Nor has it worked in the UK”
content=””
image=”http://static.businessinsider.com/image/4da2f8d0ccd1d51232190000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”monetary-policy-has-been-ineffective-in-reducing-unemployment-7″
title=”Monetary policy has been ineffective in reducing unemployment”
content=””
image=”http://static.businessinsider.com/image/4da2f8d6ccd1d54e2e370000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”in-japan-it-took-a-decade-for-businesses-to-deleverage-8″
title=”In Japan, it took a decade for businesses to deleverage”
content=””
image=”http://static.businessinsider.com/image/4da2f8dc4bd7c84a3c260000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”but-japans-gdp-still-grew-because-the-government-was-willing-to-spend-9″
title=”But Japan’s GDP still grew, because the government was willing to spend”
content=””
image=”http://static.businessinsider.com/image/4da2f8e3ccd1d51b32120000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”the-japanese-government-became-the-borrower-because-businesses-werent-interested-10″
title=”The Japanese government became the borrower, because businesses weren’t interested”
content=””
image=”http://static.businessinsider.com/image/4da2f8ec4bd7c8143e1a0000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”austerity-cuts-actually-hurt-the-japanese-economy-and-increased-its-government-deficit-11″
title=”Austerity cuts actually hurt the Japanese economy and increased its government deficit”
content=””
image=”http://static.businessinsider.com/image/4da2f8f64bd7c84a3c2a0000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”debt-shifts-from-the-private-to-the-public-sector-in-spain-12″
title=”Debt shifts from the private to the public sector in Spain”
content=””
image=”http://static.businessinsider.com/image/4da2f8fdccd1d5f935000000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”and-the-same-is-occurring-in-ireland-13″
title=”And the same is occurring in Ireland”
content=””
image=”http://static.businessinsider.com/image/4da2f905ccd1d57c36000000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”private-sector-savings-are-increasing-ahead-of-public-sector-debt-14″
title=”Private sector savings are increasing ahead of public sector debt”
content=””
image=”http://static.businessinsider.com/image/4da2f90b4bd7c84a3c2e0000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”japan-is-now-running-trade-surpluses-and-theyre-growing-15″
title=”Japan is now running trade surpluses, and they’re growing”
content=””
image=”http://static.businessinsider.com/image/4da2f913cadcbbf239200000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”in-china-domestic-demand-is-set-to-rise-and-its-wages-will-rise-too-16″
title=”In China, domestic demand is set to rise, and its wages will rise too”
content=””
image=”http://static.businessinsider.com/image/4da2f91b4bd7c8233e1c0000″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”dont-think-taking-on-more-debt-is-the-answer-17″
title=”Don’t think taking on more debt is the answer?”
content=”Niall Ferguson explains why rising levels of debt could lead to a global sovereign debt crisis >
image=”http://static.businessinsider.com/image/4c07fe4e7f8b9a1d6b690000″
caption=””
credit=””
credit_href=””
]
[/slideshow]