I want to tack on this comment by adding that everyone seems to ignore the fact that QE is essentially just printing money.
Historically this is usually coupled with run-away inflation, however since it was isolated to the wealthy sectors of the economy (rather than the typical economy as a whole) there is only inflation among goods in that sector (housing etc). The big red flag is that stocks and VC are in that pool as well.
So while there was 20 trillion dollars of growth over the last 10 years, there was also 21 trillion dollars of debt generated.
The way I see it, QE successfully generated economic growth, however none of that economic growth was "real" growth. There were new innovations, particularly in the tech space, but a huge swath of them have no method to generate real sustainable profit.
All this means we should see a MASSIVE correction in markets. Due to financial rules, banks likely won't exit the market like 2008, but the massive number of companies that took out cheap debt will be at risk.
Basically we have a potential repeat of 2008, but swap out sub-prime homeowners with corporations.
Historically this is usually coupled with run-away inflation, however since it was isolated to the wealthy sectors of the economy (rather than the typical economy as a whole) there is only inflation among goods in that sector (housing etc). The big red flag is that stocks and VC are in that pool as well.
So while there was 20 trillion dollars of growth over the last 10 years, there was also 21 trillion dollars of debt generated.
The way I see it, QE successfully generated economic growth, however none of that economic growth was "real" growth. There were new innovations, particularly in the tech space, but a huge swath of them have no method to generate real sustainable profit.
All this means we should see a MASSIVE correction in markets. Due to financial rules, banks likely won't exit the market like 2008, but the massive number of companies that took out cheap debt will be at risk.
Basically we have a potential repeat of 2008, but swap out sub-prime homeowners with corporations.