It appears few remember the epic failure of Japan’s first experiment with quantitative easing from 2001 to 2006 (that even the NY Fed can’t find a silver lining to crow about) and yet, not only is QE heralded as a success (or not) but additional QE seems to be something to celebrate (even when it’s shown to fail to achieve anything economically).
How’s QE working out for Japan?
As Michael Chadwick notes in this oddly bearish interview on CNBC, where has Japan gone in the last 14 years (since its QE started), “absolutely nowhere,” and yet, he exclaims, “sadly, across the globe all central banks are following the same failed path.” Chadwick reflects on the explosion of central bank balance sheets and asks, rhetorically, “do we really need QE every time the market gets nervous?“
Chadwick, rightly proclaims: “At this point not much matters apart from central banker comments, QE, and political promises… I wanna know about valuations, I worry about the consumer; this feels a lot like 1999 to me.”
“We have to wonder, are the central banks working together; our QE ends one day; Japan QE ramps up the next – you gotta wonder?”
“Right now the world is a very vulnerable place… we are in the midst of a big bubble that will – down the line – be referred to as ‘The QE Bubble'”
Brief clip below: