The main purpose of QE was to provide banks with more capital, in addition to supplementing (or outright replacing) their toxic assets with government debt. It was necessary because the biggest banks owned so much worthless debt that they could no longer meet their capital requirements and would have had to be considered insolvent.
The official story is that QE is needed to get the economy going, but the fact that little of the money makes it back into the economy because the Fed pays 0.25% on reserves tells the true story.
If QE never happened, then many of the biggest banks would have failed (as they deserved) and we would have suffered severely for a few years. The result of QE is that we have suffered less, but for nearly a decade (with no end in sight), and the too-big-to-fail banks are now bigger and more vulnerable than ever.
Oh no, the banks are bankrupt, what a disaster.
So if I make a bad financial decision and am in debt beyond repaying, can I call the Feds to print me several millions too?
I swear I'll pay it back eventually.
Even though I'll probably invest it in even more toxic assets because if I go bankrupt I get bailed out again anyway.
Don't you realize every dollar they print to bail out the bank decrease the value of your dollars? Which decreases the value of your time, since you still get the same amount of dollars for your work.
I'd be happier if they'd just let the banks collapse, we don't need them.
