From Charles Wyplosz, of the Graduate Institute in Geneva:
It’s a sign of the desperate situation of the euro area that people are so focused on something [referring to quantitative easing] that will not turn the tide around. It may help and doesn’t hurt, so why not do it?
Wall Street Journal, “New Bond-Buying Conundrum,” 11/3/14
Mr. Wyplosz seems aware that the positive effects of quantitative easing (QE) have been minimal, but maintaining that QE doesn’t “hurt” betrays abysmal ignorance of QE’s real world damage. QE has lowered the prevailing interest rate below where it would be in the absence of central bank intervention. By doing so, it has encouraged debt, overproduction, and speculation, while discouraging saving by obliterating returns on low-risk income-bearing investments. Perhaps in the rarefied world of Swiss academia that doesn’t count as hurtful, harmful, or dangerous, but QE is the flimsy superstructure of a global skyscraper of cards (see A Skyscraper of Cards) whose collapse may well usher in the most catastrophic crash of all time.
