Re: Longer Term Impact
Money printing has driven inflation. Lots of it.
But not - directly at least - QE. QE was in fact driving inflation that had already happened (but was masked in silly, irrelevant price indexes by the rise of cheap Chinese goods). The real inflation was seen in house prices in the big bubble of about 2000-2005, which did the real damage, robbing the future to enrich the already-rich (house owners). The banks lending money that will never be repaid created a gaping hole, which QE then plugged.
The late, great, Terry Pratchett explained the whole system beautifully, though only in passing. He called it the Pork Futures Warehouse. And that was long before the crash!
Some of us who saw the bust coming actually took the trouble to find out about saver protection. I even forewent Icesave's market-beating interest in 2005/6 in favour of something on lower interest but protected, for which of course I was duly penalised.
As for bailouts, THEY SHOULD NOT HAVE HAPPENED. Depositor protection (including emergency measures to feed cash machines) would've cost a whole lot less. More than half a decade on, we should've seen the rise of new alternatives to traditional banks, yet they're limited to small niches by bloated zombies standing in the way of innovation. Bailouts are a negation of all that's good about capitalism! And of course they have knock-on effects:
- a long-term massive deficit placing a deadweight on the future
- interest rates detached from reality
- the rise of a zombie economy
- underwriting leverage on and income from land and housing, financially privileging rentierism over productive investment. Even (by some reports) prostituting Prime London to the global super-rich as an asset class like gold that never leaves the bank vault.
- trashing of pensions for anyone not already retired but within maybe 25 years (from the bailouts) of it. And its corollory: the zombification of of many companies with the misfortune to have been running final-salary schemes.
Biting the hand that feeds IT
