QE – speeds up loss of wealth

We have long been against QE here at Bogpaper. It is a dangerous and reactive policy to something which was caused by dangerous and reactive policies in the first place.

Even Federal Reserve Chairman, Ben Bernanke, late last week admitted that these stimulus measures were unproven in history and they were walking down an untrodden path.

What’s so sad is, it isn’t just QE which removes wealth from those who can least afford it. Money creation doesn’t have to be a part of some stimulus policy, it happens every day through the clever mechanics in our banking system. Since 1967, we have lost 90% of our wealth.

So, QE is just speeding up something which was going too fast already. Whilst Bernanke, King and Draghi are yet to announce any stimulus packages this quarter this is no reason to celebrate. The rounds of stimulus are coming, no doubt about it.

A couple of weeks ago, Fraser Nelson, of the Spectator wrote a brilliant short piece on QE and how it works as a bad Robin – taking money to the rich from the poor.

We would show it to you here, but the graph is rather interesting and interactive and so is most probably better appreciated over on Nelson’s original post.

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