Thursday, June 25, 2015

For The First Time Ever, QE Has Officially Failed

This is the other side of unintended consequences.  The QE mechanism is rather esoteric, so to put it in layman's terms:  what goes up, must come down.  With rising yields, bond prices drop, which will tank the equities and real estate markets.

Another way to put it is:  there is no free lunch.  Running the money printing press doesn't build long-term wealth.  It enables capital misallocation and increases the debt burden.

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