Why a return to QE would be disastrous ?
12-02-2022 8:54 pm“Economics is not an exact science. It’s a combination of art and elements of science”, said Paul Samuelson, the first American to win the Nobel Prize in Economic Sciences. Central banks seem to have forgotten this lesson in recent decades. Banning central banks from purchasing the debt of their own country has been, until the 2008 crisis, engraved in scarlet letters on the first page of any monetary policy textbook. The reason behind this was the inflationary consequences that such an approach, involving the printing of money, would cause. Yet, the act of printing money, which soothed the pains of the economic crisis at first, has been stubbornly used for more than a decade until it became addictive. Governments and financial markets alike became the ‘prisoners’ of free money printed by the central banks in order to finance national budget deficits and boost the economy. The
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