The Gains & Pains newsletter recently published a brief article on Quantitative Easing (QE). In broad strokes, the article explained that although QE had failed to cause a positive change in the Japanese, US and EU economies, China was nevertheless trying to use QE to save the Chinese economy from its current recession and/or depression.
The following text is from that article and is sometimes verbatim and sometimes paraphrased by me:
“It wasn’t until late 2014 when the Japanese economy truly became completely and utterly broken. That’s when the Bank of Japan decided to increase its already far-too-big QE program, not because doing so would benefit the country, but because it would bring economists’ forecast in line with governor Kuroda’s intended inflation numbers.
“The Central Banks were forcing reality to match Central Bankers’ theories and forecasts. If reality didn’t react as intended, it wasn’t because the theories were misguided . . . it was because Central Bankers simply hadn’t yet printed enough new fiat yen.”