ETF Trends
ETF Trends

New York Magazine torched Amity Shlaes and the other economist who all signed a letter in 2010 warning of the inflation and currency debasement to come from quantitative easing (QE). Shlaes then dug in further in the National Review defending the position, a position that the New York Magazine called totally wrong.

Headline inflation certainly has not been problematic, if anything it is arguably too low and the US dollar has gotten stronger as QE has gone on. Actually it is better to think of the currency action being more about the other currencies being weaker because their governments/central banks need them to be weaker.

While we’re at it some were worried about sky-high interest rates and that has not happened other than the brief scare back in June of 2013.

All the points made by Shlaes and anyone else warning about QE are pretty basic economic concepts about how it is supposed to work; a central bank buying up debt resulting in balance sheet expansion should have some pretty serious consequences. Clearly there have been no dire consequences, some economic data has looked pretty good and of course the stock market has done well.

The more interesting question is why have there been no dire consequences? Often when someone is challenged on being wrong about this sort of thing they will reply about being early. How likely is it that the worriers are simply early?

Showing Page 1 of 2