{"id":713,"date":"2014-10-27T19:20:12","date_gmt":"2014-10-27T23:20:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=713"},"modified":"2014-10-27T19:20:12","modified_gmt":"2014-10-27T23:20:12","slug":"quantitative-easing-is-like-treating-cancer-with-aspirin","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=713","title":{"rendered":"Quantitative Easing is like \u201ctreating cancer with Aspirin\u201d"},"content":{"rendered":"<p><a href=\"http:\/\/www.sovereignman.com\/trends\/quantitative-easing-is-like-treating-cancer-with-aspirin-15427\/\">Quantitative Easing is like \u201ctreating cancer with Aspirin\u201d<\/a>.<\/p>\n<p style=\"box-sizing: border-box; word-wrap: break-word; padding: 0px; margin: 0px 0px 27px 0px;\">Shortly before leaving the Fed this year, Ben Bernanke rather pompously declared that Quantitative Easing \u201cworks in practice, but it doesn\u2019t work in theory.\u201d<\/p>\n<p style=\"box-sizing: border-box; word-wrap: break-word; padding: 0px; margin: 0px 0px 27px 0px;\">There is, of course, no counter-factual.<\/p>\n<p style=\"box-sizing: border-box; word-wrap: break-word; padding: 0px; margin: 0px 0px 27px 0px;\">We\u2019ll never know what might have happened if the world\u2019s central banks had not thrown trillions of dollars at the banking system, and instead let the free market work its magic on an overleveraged financial system.<\/p>\n<p style=\"box-sizing: border-box; word-wrap: break-word; padding: 0px; margin: 0px 0px 27px 0px;\">But to suggest credibly that QE has worked, we first have to agree on a definition of what \u201cwork\u201d means, and on what problem QE was meant to solve.<\/p>\n<p style=\"box-sizing: border-box; word-wrap: break-word; padding: 0px; margin: 0px 0px 27px 0px;\">If the objective of QE was to drive down longer term interest rates, given that short term rates were already at zero, then we would have to concede that in this somewhat narrow context, QE has \u201cworked\u201d.<\/p>\n<p style=\"box-sizing: border-box; word-wrap: break-word; padding: 0px; margin: 0px 0px 27px 0px;\">&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Quantitative Easing is like \u201ctreating cancer with Aspirin\u201d. Shortly before leaving the Fed this year, Ben Bernanke rather pompously declared that Quantitative Easing \u201cworks in practice, but it doesn\u2019t work in theory.\u201d There is, of course, no counter-factual. We\u2019ll never know what might have happened if the world\u2019s central banks had not thrown trillions of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[68,124,317,661,662],"class_list":["post-713","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ben-bernanke","tag-central-banks","tag-financial-system","tag-qe","tag-quantitative-easing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=713"}],"version-history":[{"count":0,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/713\/revisions"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}