Central banks are in the business of market manipulation via interest rates, and money supply. This is to control growth and inflation so that business cycles are smoothed out to a degree.
Central banks are however beholden to national and international laws, governmental scrutiny, and the international financial market. Yes they can - and do - manipulate the markets on an unfathomable scale, but it's to enable and protect national and international economies, instead of optimising for quick wins and personal gain.
And it's a good thing that the international financial market and governments are not driven by self interest... Decisions like quantitative easing completely distort our economy and more importantly benefit a certain group of individuals and hurt another. To imagine that these considerations are put aside by those involved in these decisions is unreasonable.
I mean I don't understand the cognitive dissonance here. In nearly every action our government carries out we can see the behind the scenes motivations which tend to be appeal to special interests. And here you are straight faced arguing that because quantitative easing is done by government (and financial markets) it's somehow above the notion of quick wins and personal gain. This is illogical.
The problem with that approach is that market cycles serve important purpose: they faciliate best allocation of our resources by ensuring that inefficient companies will go bankrupt. Smoothing those cycles out enables poorly managed companies to stay in business for way too long. Then, since there's a limit to a market manipulation that central banks can do we end up with one huge crisis, like Great Depression, or 2008 housing buble, instead of series of small ones.
This austrian-style economic thinking about market cycles lines up with bitcoin ideology but is far from being accepted in mainstream economcs. It is flimsy pseudoscience.
Appeals to authority are generally not great, but this is made even more bizarre given that our current economic systems seem to be teetering on a precipice. Think about how truly desperate we are when we need to resort to quantitative easing, zero interest rates, and even flirting with negative interest rates - just to desperately try to maintain the status quo.
This doesn't mean any alternative is better, but rather that trying to refute alternatives by appeals to authority is an even worse idea than it usually is. And it's usually already an awful idea!
Plenty of poorly managed companies are still able to stay in business despite economic downturns because they have inertia.
Not to mention that, businesses going under means people without jobs. Lots of businesses going under at the same time means lots of people without jobs, and fewer companies able to take them on. That's a bad thing, no matter how you slice it.
Inefficient and poorly run things die in down cycles but so do new things and innovative things. Efforts to innovate must usually burn money for a long time and are more vulnerable to downturns since in downturns people become more conservative.
It's interesting that bitcoin (and crypto maximalists in general) repeatedly harp on and attack QE as if it was the end of democracy itself.
QE is just another tool for monetary policy designed to combat deflation and increase available capital supply as a stimulus measure. Because QE belongs to the school of thought that the economy is driven by consumer spending as opposed to consumer savings.
Could you please elaborate on what you mean by:
> steal money from the public with QE
?
Sure. QE is buying stock with printed money, inflating stock prices. People with lots of stocks get inflated value. When the inflated value leaves the stock market, it has an effect of deflating the value of the USD. It's a slow inflationary method of distributing public funds to the rich in the stock market, while creating market manipulation tools to coerce stock-driven companies into essentially being proxy government entities, since a large percentage of their value can be decided with 'monetary policy'(leading to things like google's pentagon drone ai collaboration).
I also believe SV companies are lining up to IPO because of this blank check.
First off (but probably inconsequential), why do you put "monetary policy" in quotations? Monetary policy is literally an Econ 101 term.
But also: A large percentage of any public companies' value can be decided by monetary policy, in the sense a companies value can be decided by inflation or deflation. Monetary policy is just an official term for central bank decisions to influence the supply of money and credit in an economy.
> When the inflated value leaves the stock market, it has an effect of deflating the value of the USD
If you're trying to argue that QE is bad because inflation is bad and people participate in profit taking, you'll need to get over that. What would you like to do? Ban the sale of stocks by persons over a certain net-worth?
> while creating market manipulation tools to coerce stock-driven companies
What, pray tell, are these tools? You know, besides creating mild inflation and some influence on interest rates?
Additionally, you seem to have forgotten that an explicit goal of QE is to lower interest rates, allowing everyone, not just the rich, easier access to capital in order to stimulate the economy. QE demonstratively does not solely redistribute more wealth to the wealthy.
Furthermore, your entire premise is shaky, considering the most prominent historical example (the US recession) mostly consisted of the Fed purchasing $4.5 trillion of mortgage-backed securities.
It's really not exactly "making money out of thin air" considering the Fed purchased securities pegged to a real good/service, mortgages.
Lastly, SV IPOs weren't exactly popular last year. Nor in 2016 or 2015.
