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QE was a response to deflationary pressures related to massive deleveraging after the financial crisis. Inflation has barely touched 2% since then, and there wa
by Areading314 7y ago
QE was a response to deflationary pressures related to massive deleveraging after the financial crisis. Inflation has barely touched 2% since then, and there was no devaluation of the dollar against foreign currencies. In fact the dollar has been appreciating against most other major currencies.
- paganel 7y ago>and there was no devaluation of the dollar against foreign currencies. There was certainly a strong over-valuation of the economic entities whose bonds the ECB bought (I think the Fed did a similar thing, not 100% sure as I live in Europe and I follow ECB's policies more closely). Had the ECB not bought those bonds then maybe the Chinese companies would have been able to buy even more stuff in Europe, as things stood they were only able to purchase the Piraeus port (because the Greeks were basically in default) and some other lesser assets. That's still economic protectionism.