Quantitative easing stabilized banks while inflating asset values for the affluent

Evidence

The Federal Reserve facilitated $7.7 trillion in liquidity for banks, but nothing for homeowners. Most importantly, according to Nick Srnicek’s account, is that key interest rates suddenly dropped around the world. This “easy money” era is visible in figure 1.10, which illustrates the long-term interest rate environment in the U.S. When interest rates at zero weren’t enough, central banks engaged in “quantitative easing,” in which central banks buy government debt and bonds, increasing the demand for other financial assets, easing credit, and raising asset prices, thereby stimulating the wider economy. … “While quantitative easing (QE) may have stabilised the financial system,” according to Ann Pettifor, “it inflated the value of assets like property—owned on the whole, by the more affluent. As such, QE contributed to rising inequality and to the political and social instability associated with it.” — Andrew deWaard, Derivative Media, 84

Categorization

• DEFINE: Explains exactly how quantitative easing functions as a central-bank tool — buying government debt to raise asset prices and ease credit.
• XREF: Connects to the reader’s stated aim: the Fed’s $7.7T for banks vs nothing for homeowners is the ownership-structure asymmetry the book traces into cultural form. — connects to: Central banks substituted asset inflation for fiscal stimulus after 1998 — Nick Srnicek, Platform Capitalism, 30; Deflation increased the wealth of British financial asset holders — Clara E. Mattei, The Capital Order: How Economists…, 1697; Capital-account liberalization creates surplus-deficit imbalances and boom-bust cycles — Natascha van der Zwan, Making Sense of Financialization, 34 (+2 more)