If I Could Fix the Problem That The World’s Central Banker Made
The thing which I want to change the most in this world is the central bank’s policy after the financial crisis in 2008. Central banks were using unprecedented monetary policy so called Quantitative Easing that it was actually printing money. It was a very pathetic policy for most people unless you were a very tiny group of people who benefited by that policy.
After this policy, the world’s wealth inequities have become historical high because only people who doing business or have capital were the only people who benefited by that. Most money central banks printed went to buy financial assets, like real estate, stock, and corporate bond. So you can see there were more people couldn’t afford to buy a house than before. But for people who already had a house, they became richer. That’s contrary to the original purpose, helping people who lacking resources to survive the financial crisis.
Even though some people would argue, the unemployment rate drops largely and it is almost in the all-time low. But in this ten years period, wages didn’t gained after adjusting by inflation while the central banker print about five times amount of money than in 2008. It basically means that all the money were went into the richer and the richest. And for the rest of the people, they are suffering because the tuition, housing price were all skyrocket.
Finally, the financial market should select better companies to survive, but using QE means it was helping inefficient, unethical companies, which were not very good at managing risk, to live. That will cause a lot of problems, better companies are going to take unnecessary risks to make money because when they are facing problems. Central banks will help them. And finally, we will face another crisis similar to 2008.
In conclusion, if I can change one thing in the world’s central bank policy. I will definitely abandon the QE, and let the market select who are mean to survive. And we can see a better world which doesn’t have so large inequality. Everyone will happier than what we are now.
