You can understand a lot about QE if you can just understand why it is so hard to understand

One of the reasons QE is so confusing is it is one thing in theory (left), quite another in practice (right). Cookie Monster cupcakes by Julie Elliott/ CC BY, Lizzie’s batch by Zoe / CC BY

I understand Quantitative Easing.

The process of trying to understand it was so confusing that in some way the confusion was illuminating. So rather than try and explain what Quantitative Easing is (as I do here), in this post I’m going to try and explain why it is so hard to explain.

It is both the most boring thing in the world and the most interesting in the world

Like the lockdown, it flips between being about everything and about nothing. It’s a decision that central banks made quickly that was temporary, or it’s the most important policy decision ever, that seems to be going on for ever.

It’s about something boring like bond yields or suddenly it’s about someone’s nan’s pension. It’s literally about her future.

And then it’s like, oh shit, it’s not just Nan’s future. It’s all our futures. But noone seems clear what it even is.

It’s not what a lot of people think it is

A lot of people think it is something like ‘giving money to banks’. While I think you can interpret QE in many ways, you can’t describe the process like that. If someone describes QE to…