The decision to pump billions into the US economy through another round of QE by printing billions of dollars arouses mixed feelings.
I fully subscribe to the view that we were saved from a worse economic collapse by the banks' earlier willingness to force rates down to near zero and print money. I worry, however, that each dose, like a drug, is less effective than the one before and the side effects get worse.
One problem is that very little of this money gets to the industrial and commercial borrowers who could use it to fire up the economy. Instead, it gets stuck in the banks or finds its way into the markets, where it creates financial bubbles and causes prices to lose touch with supply and demand. That is storing up huge problems for the future.