QE is free money which has seeped into the stock market and housing market for a feel-good factor, but it hasn't fixed any of the structural problems in the economy.
The Bank of England has kept interest rates at record lows for the longest period of time in its entire history. That should tell you the scale of the problem.
Now, if low interest rates and QE were "good" for the economy, it would be the default strategy not the one of last resort.
Don't be so quick to rule out hyperinflation. At some point, this charade will come to an end.
QE fixes some problems. It makes other problems worse.
If everyone has borrowed too much money, the QE can fix it. It would be better if the regulators stopped banks from being irresponsible, but it's unrealistic to expect the government and private sector will do their jobs perfectly.
If sticky wages are causing problems, inflation can fix that. Forcing wages down via inflation doesn't hurt workers so much, because it also means their debts will drop. (Yes, it punishes savers, but Greece apparently doesn't have too many of those).
Assuming the central bank is mildly competent, it's good to have that option. The problem is, the EU might not have one single problem. Wages in Germany might be fine, while wages in Greece are too high. If the EU creates inflation, it will unfairly cause German workers to have a pay cut. If it keeps money tight, then Greek wages will be too high.
If there were uniform standards for banks, wages, etc, then it wouldn't be such a problem. But Greece and Germany are different countries, and they'll have different standards. So the EU can't manage inflation is a targeted way.
Take a single country, like the UK, why should hard-working folk who save their money be punished? Why should their savings be eroded with inflation and a real interest rate which is negative?
Why should those who were irresponsible, those who borrowed too much or took risky bets be the ones who are protected?
The problem is debt, and the solution is not more debt and reckless money printing.
You are wrong. You have the evidence of the past five years in front of you. The UK and the USA pursued money printing and it has not resulted in any disaster. The eurozone is a hairs breadth away from deflation, much of the eurozone is at or near recession if not outright depression and youth unemployment is high and getting higher.
And this is in a region that suffered nowhere near as badly in the initial financial crisis, it has been brought about by an incompetently created currency area and an idiotic central bank.
Are you forgetting the derivatives which major banks hold? JP Morgan has outstanding derivatives in the trillions. Ask the US comptroller general who reported around $78 Trillion just two years ago.
Even if netted out, if just some of those bets go bad, the bank is insolvent. It does not have the capital base to withstand such an event. Not even if it grabbed all the client bank deposits on hand (like in Cyprus), it is bust.
Ordinary people get stuffed with austerity and savers get stiffed with zero percent interest. Meanwhile banks are given endless overt and covert sleight-of-hand bail-outs.
QE is not designed to save the economy or help workers, it is designed to save the banking system and the insolvent banks within it.
Yes, but savers still do pretty well. QE will save the economy, but not house prices, and not the people who bought multiple leveraged IPs. Savers will still be OK (since the money multiplier will drop there won't be inflation - this can and should be enforced with more prudent bank regulations).
And if deflation hits, savers will be less fucked, but still pretty fucked.
The Bank of England has kept interest rates at record lows for the longest period of time in its entire history. That should tell you the scale of the problem.
Now, if low interest rates and QE were "good" for the economy, it would be the default strategy not the one of last resort.
Don't be so quick to rule out hyperinflation. At some point, this charade will come to an end.