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QE is not resulting in enough growth in the Western world, because there are just not enough profitable businesses for investors to pour their cheap money into.
by jussij 10y ago
QE is not resulting in enough growth in the Western world, because there are just not enough profitable businesses for investors to pour their cheap money into.
The central bankers created QE as a way to add liquidity into the markets to allow banks to lend, to allow small businesses to grow, to help economies to generate growth.
Unfortunately that money was lent to the big bankers and they realized they could take that money and make much easier profits.
The carry trade has been going on for decades and no one has taken any steps to stop it.
It is very easy to for institutes with big wallets, to borrow large amounts of money from central banks only to take advantage of countries with an interest rate differentials.
Then take a look at how JPMorgan Chase, after loosing billions on hedge positions, they took a US government bale out with the promise not to go back to their bad old ways of gambling with hedge positions.
They took the government money and sure enough put it all back on the table betting red, only find it came up black:
http://www.abc.net.au/news/2013-09-20/jp-morgan-fined-920-million-usd-in-london-whale-trading-scandal/4970068 http://www.abc.net.au/news/2013-09-20/jp-morgan-fined-920-mi...
A broken promise to the US people with lots of money lost and as always no consequences for those who took the money on false pretenses.
In reality I can see the sense of the bet. Take someone else's money and if you lose, the billions lost will be covered by someone else.