Here is an excerpt:
"With respect to QE, the evidence indicates that quantitative easing is not rocket fuel – at best, it is a bungee cord; reasonably effective in helping confidence and risk premiums normalize when they have spiked in response to fear over the prior 6-months, and capable of releasing just enough pent-up demand to kick a can, but with little durable economic effect once short-term interest rates have hit the zero bound (which was nearly $2 trillion ago). We’re really left with are arguments that hinge on
superstition – effectively arguments that “the Fed can do this forever, and it’s not going to stop.” There's no problem with claiming that QE outweighs all other considerations, in the same way that we've found that extreme overvalued, overbought, overbullish conditions often outweigh trend-following onsiderations. Just make sure that this faith in QE is justified. I don't believe it is.
My impression is that this is the claim; that quantitative easing, in and of itself, is a lucky rabbit’s foot, and that it changes everything, by mechanisms that investors need not understand, and makes all historical evidence and analysis irrelevant; that despite the historically tight and economically tractable relationship between corporate surpluses and the combined deficits of government and households**, somehow this time is different, and profit margins will remain elevated forever. I doubt that any of this will prove to be correct, but as John Kenneth Galbraith wrote in 1954 about the Great Crash, “the time had come, as in all periods of speculation, when men sought not to be persuaded by the reality of things but to find excuses for escaping into the new world of fantasy.”
That what I said.
"I see the incessant focus on the power of the central bank to manage an economy as being misguided and inappropriate. The world reached a financial crisis principally because of a lack of proper regulation and enforcement of the financial services industry. In addtion to this, the Eurozone reached their crisis because they gave up their currencies, and the global trade system shifted production to Germany for high valued manufacturing and China for low valued manufacturing. Regardless of the price level, these economies are not going to generate jobs for their unemployed. Many academics and market participants who view religion as nothing more than superstition, seem to have elevated the central banks to Christ-like status. If we want to eat bread and wine, we need to start growing some wheat and grapes and stop asking the central bank to
'make do' with the water and loaf we left in the toilet."