Quantitative easing failed – they should have thrown cash out of helicopters

Who benefited from the billions of pounds created? The banks of course, says Malcolm Parkin

The £375 billion of quantitative easing – money creation – used to improve the stagnant economy during 2015 and 2016, seems to have vanished without trace.

However, it’s certainly not without effect, even though the nature of that effect has not been quite what was intended.

If we assume the population of the UK is 63 million, then that huge amount of money represents nearly £6,000 per man, woman and child. £24,000 for a family of four, yet I never saw my £6,000 or even any benefit from it. So where did it go?

The banking system was entrusted with the dispersal of this sum into the economy, but because they were already having trouble lending money in a recession, nobody wanted it. So, they first of all used it to patch holes in their own balance sheets, to fix bad debts, and then to cover some of their adverse commitments in the ‘casino’ operation euphemistically known as the derivatives market. Betting to you and me.

The thinking behind QE is the ‘trickle-down effect’ of course, but that wasn’t going to happen if the banks could not get the money into the economy in the first place, to stimulate it as needed and intended.

But they did of course find enthusiastic takers for that money in their own departments, who used it to speculate in the stock market, driving it to new heights in a recession. Bonuses were also no doubt paid for that pointless activity which provided a much need-