Not liquidity but solvency
The GFC was sold by the banks as a liquidity crisis, "look we've got all these assets (triple A rated with a cherry on top) but due to a few delinquent borrowers we can't capitalise on them".
(banks are expert at rigging markets and misselling to the unwary/miseducated)
The governments believed them (were in hock to them) and lent them huge sums of money against these assets at very low rates.
The assets are worth shit*. It wasn't liquidity it was solvency. Banks had bought and sold these worthless assets to each other in a massive circle jerk, they knew they were worthless if liquidated but they were good as security because they were rated and had insurance.
When the few delinquent borrowers (remember them) defaulted it took out the insurance company (AIG remember them) and then the banks.
Publicly financed QE has allowed the insolvent (and corrupt) banking sector (with their revovling door) to stagger on, immune from failure their rapacity knows no bounds.
Well there are bounds, the Sovereigns have mortgaged themselves up to the hilt to save the private banking system, these banks are still on (very expensive) life support (they are Zombies and cannot be ressurected, they wiil consume all)
The next crash will take out the overleveraged Sovereigns and there will be nothing the Central Banks can do.
There is (was, I haven't checked recently) an interesting description of what QE is and does on the BOE website that was only released after they started doing it.
* the average house is 'worth' nearly 200 grand not because many people actually have that kind of money but solely because the banks (who have a vested interest in lending larger sums) are prepared to lend two competing people any amount of money, if mortgages were based upon 2.5 times income the average house would be 75 grand (including borrower funded deposit).
Biting the hand that feeds IT
