For more information please contact us

ashmail [at] ashmoregroup [dot] com (Email Ashmore)

The failure of QE

The Emerging View

23 April 2015

Quantitative easing (QE) is failing. Instead of funnelling funds into the real economy, the policy is inflating bubbles in both equity and bond markets in the HIDCs (Heavily Indebted Developed Countries). Lately, as many HIDC bond yields approach zero, QE money is migrating into currency markets where it is causing growing volatility, which is now beginning to create serious economic problems. These unintended consequences are undermining the effectiveness of QE and the failure of governments to reform and deleverage is compounding the problem. Today, a major attraction of Emerging Markets (EM) fixed income investment is one of insurance against large permanent loss – in EM you can still be confident that you are not buying into a bubble.

Full article

Latest Insights

View all