lundi 14 octobre 2013

Financial Times : le QE est au mieux injuste, au pire diabolique

Et beh, ça aura mis le temps...

QE Is "At Best An Unfair And At Worst An Evil Policy"
ZeroHedge, 14/10/2013 (traduire en Français texte en anglais )
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Five years ago, when QE first started, we blasted the Fed's "Plan Z" systemic rescue "policy" - which was merely a tried and true dilutive fallback plan used by every collapsing monetary regime starting with the Romans - stating it does absolutely nothing to resolve the biggest underlying threat to the economy and the western way of life, namely the epic accumulation of debt (most of it bad), courtesy of a Fed which has now unleashed a perpetual "buyer of only resort" QE (as we predicted months before QEternity was revealed), which instead only redistributes wealth from the middle class to the wealthiest 0.01%, while providing scraps to the poorest to keep them occupied and away from very violent thoughts.

We were quickly branded as conspiracy theorists, with the confused legacy media promptly resorting to ad hominem attacks: after all, that is what it really knows how to do when all else fails.

Five years, and 20 million Americans on foodstamps later, such conspiratorial thinking has permeated such bastions of the status quo as Citigroup, whose Matt King in a recent expose about the biggest debt bubble ever, showed that not only does record-er debt not fix a record debt problem, but that the "slate has not been wiped clean." At least not yet: it will eventually, in a monetary supernova that has been only delayed, following which the Fed will, finally, be forever out of the picture. A welcome development.

So it is with great amusement that we watch how one after another vehicles of legacy, conventional thought turn, and confirm that Zero Hedge was hardly conspiratorial with our assessment back in 2009. We were just about 5 years ahead of the curve.

Enter the FT, which in an Op-Ed today titled "QE has stigmatised the well-off" says that "despite it being entirely justified as a save-the-world policy in its first round, it is still at best an unfair and at worst an evil policy. Why? Because of the way in which it redistributes wealth. Very low interest rates and the ongoing purchase of government bonds were supposed to lead to a huge investment boom as people put money into capital projects and new business that would yield a better return than they could get on cash or sovereign bonds."

Some more amusing, if very overdue revelations:

I went to a debate at Edinburgh’s Heriot Watt University this week. It asked whether quantitative easing had been a mistake or not. A few of my favourite people were speaking – Scotland’s investment trust guru Robin Angus, The Scotsman’s one-time executive editor Bill Jamieson, bear market expert Russell Napier and a new entry to my list, Heriot Watt academic David Cobham.

Most debates on QE are crushingly boring. This wasn’t, largely because once you had dissected the arguments there was very little disagreement. There was argument about how long it should have gone on for and minor fisticuffs about when the inflation it has made inevitable will turn up.

...

So while QE might have stopped a whopping fall in nominal GDP (Cobham puts it at somewhere between 5 and 12 per cent) it has also pushed down the purchasing power of the general population and devastated their savings.

That, says Robin Angus, along with the fact that after the first dose we don’t have the faintest idea whether it works or not, makes QE a policy that “combines the integrity of the Bullingdon Club with the probity of an asylum for the insane”. Not everyone feels so strongly about QE. But you can’t deny that if the point of government is to have a go at creating conditions that will allow everyone to get better off, it isn’t going very well. This isn’t just as a result of QE. It’s also about the way in which we incentivise investment across the economy.* It is about the ongoing attempts to shore up the housing market – after all, nothing pushes up the cost of housing like a rise in the price of houses. And of course it is about the fact that wealth was held pretty unequally even before QE began.

...

[I]ntensely activist monetary policy of the type we have seen since the great financial crisis clearly comes with enormous and unwelcome side effects.

Clearly? If it is so "clear" then why in year five of QE... oh forget it.

But here’s the thing. Modern governments like to have a go at fixing their mistakes. If they create a bad policy they are generally more likely to create more bad policies to fix the problems created by the first bad policy (witness the UK housing market) than dump the first bad policy. So it is with wealth distribution. Having come up with a macroeconomic policy that will stun historians with its scale and innovation – and not necessarily in a good way – they now feel they have to attempt to come up with micro policies to dampen the social effects of the way it has distributed wealth. The rich have gained from QE, so they must lose elsewhere.

Only they never do. Because the second a threat emerges that may "impair" the rich, what happens? Why more screams of mutual assured destruction, taxpayer funded bailouts, kicking the can with even more of the same failed policies now entering their fifth year of wealth transfer - because this time it will be different - and so on.

And now we lean back and await for even more of the incisive mainstream media to suddenly come up with this timely, non-conspiratorial observation.

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