A few years ago someone (sorry, don’t remember who) strung together a theory that the financial crisis stemmed from going off the gold standard in 1971. Short version; that led to the huge run up in gold, albeit slightly delayed, in the 1970s which contributed to the huge run up in interest rates which then led to the multi decade bull market in bonds which then caused all the distortions that triggered the financial crisis.
If that registers at all on your plausibility meter then no painful consequences from QE after a few years isn’t shocking. There have been other economic events that have had long theoretical shadows so don’t be surprised if this one does too.
That last sentence is the whole point of this post. The typical advisor or do it yourself investor does not need to have the ideological stake here that Shlaes (or even Rick Santelli) has, I certainly don’t. The potential utility in understanding the potential here is reduced likelihood of emotion or confusion if it turns out that bad things do ensue in the future.
This article was written by AdvisorShares ETF Strategist Roger Nusbaum.