Quantitative Easing

Here is a nice explanation of quantitative easing provided by the Financial Times. This is timely because the central banks have run out of ammunition with monetary policy.



With central banks using monetary policy and quantitative easing to attack the current recession/depression, governments have to do their bit with fiscal policy. While the US and Chinese governments are taking the lead in fiscal policy, most other governments are dragging their heels. Europe is especially reluctant. Sadly, this reduces the effectiveness of the policies of those pursuing fiscal policy. The laggards seem to be hoping to get a free lunch rather than carry their share of the load. This bodes ill for everyone.