@bswud Your February 13, 2015 post is about short rates only. The goal of QE is CBs found ZIRP was not expanding productive investment…
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Replying to @Meaningness
@bswud …so with QE they control long rates as well. That has greatly increased overall credit, but mostly not productive investment…1 reply 0 retweets 0 likes -
Replying to @Meaningness
@bswud Looks like the next CB move of desperation will be to buy IG corporates and eventually equity shares directly, but that won’t work if1 reply 0 retweets 0 likes -
Replying to @Meaningness
@bswud …no one actually WANTS to make productive investments, or can’t see any. So why would that happen?1 reply 0 retweets 0 likes -
Replying to @Meaningness
@bswud We probably agree that the key point is “without a stable macroeconomic environment, capitalism cannot create wealth.” I suspect >1 reply 0 retweets 2 likes -
Replying to @Meaningness
@bswud the wild CB flailing since 2008, and consequent vast distortions, give decision-makers the sense that macroeconomy is badly unstable>1 reply 0 retweets 0 likes -
Replying to @Meaningness
@bswud partly endogenously and partly cuz vast, political, unpredictable state/CB interventions follow any significant endogenous changes1 reply 0 retweets 0 likes -
Replying to @Meaningness
@bswud In other words, why build a capital asset that pays off only over 15 years if CBs and state actions likely wreck the EV in two years?1 reply 0 retweets 0 likes -
Replying to @Meaningness
@Meaningness so I'm broadly with you here, but I don't think that's the point of QE. In my view QE intended to meet spiking demand for money1 reply 0 retweets 0 likes -
Replying to @bswud
@Meaningness crisis -> uncertainty -> higher demand for money. Central bank should meet this by expanding money supply2 replies 0 retweets 0 likes
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Replying to @Meaningness
@bswud However, the stated intent of QE is to penalize saving by driving returns negative, in order to incentivize investment instead.1 reply 0 retweets 1 like -
Replying to @Meaningness
@bswud And the CB share of government securities is very high now—Fed QE took off in 2012, after your graph ends, & is much higher in EU&JP1 reply 0 retweets 0 likes - 16 more replies
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