Ultimately, QE2 screwed savers by robbing them of income through the Fed’s treasury purchases, undermined banks’ earnings by in effect swapping a higher yielding treasury with bank reserves that today yield a mere .25%, and eviscerated the living standards of the middle class by helping to spike the speculative punch bowl in the commodities space. Not a bad trifecta for a Fed Chairman who claims to be doing everything in his power to prevent us from becoming the next Japan but who in fact is hastening our arrival at that very destination
Even so, things are beginning to look unnervingly similar to what happened in Japan. Economic developments seem set on much the same glide path. Two and a half years after the collapse of Lehman Brothers, there is still painfully little growth to speak of in the UK economy.