When markets get fucky, piles of money get nervous. The only thing that gives piles of money the right to exist is the fact that they keep growing. If one pile has a worse year than the other piles (even if it still gets bigger!), investors take money away from the pile and put it in others. this can be a death spiral, as investors lose “confidence” in a given pile. It is critical to piles of money that they grow, better than their competitors even.

Frat boys have learned just enough math to figure out how money behaves during “normal” market conditions. It’s pretty safe, there’s lots of money swimming around and everyone feels OK for the most part.

But when they get fucky, that’s when ignorance and ultimately fear overtake the frat boys. They become ghostly pale, because their managers have warned them that the robots are no help during market apocalypses.

So the money freezes up. The frat boys don’t know where to keep it safe. While there’s a lot of upside to be found, there are also horror stories of incredibly wealthy people losing everything during these times.

So, in my head, QE was something to protect against this. Originally it was for markets that were so frightened that frat boys wouldn’t move even a single dollar. There’s probably several ways to do QE, but they boil down to giving the frat guys some money to play with.

I think they end up making it a little less obvious by buying “totally legit and valuable” assets from the dumbest frat guys, which they see as removing some of the most toxic assets (debts that will never in a million years be repaid) from the playing field. So the money moves a bit, frat guys come out of their shell a little more. Eventually they throw grand parties, trading and boofing all around the clock.

I think they used some of this style QE at the real outsets—08,09, when the US realized that Covid was coming for us. You can justify whatever you like during these times of high crisis. And if your job is to keep capitalism functioning, it almost certainly does help. Anything is better than death, even if you look a little silly clinging to life.

But during less flashy times of economic distress, QE’s just there to make sure there’s so much money floating around that everyone keeps going after some; that they don’t let fear (or observably declining profits) paralyze them.

Because in order to skim some money off the top, the moneys gotta be moving. If it just sits there, you can’t use the US a dollar as a battering ram against the world’s peasant farmers and menial laborers.

Since the US shipped productive industry elsewhere in the 1970s, the dollar has decided it will no longer dredge up raw materials or produce goods itself—it will sit at the apex of the supply chain, and make its profits from declaring exactly which parts of the commodity circuit “add value”.

It turns out, a lot of value isn’t added when workers put any screws in or solder on an iPhone, nor where the bauxite is mined. Most if it ends up on accountants’ ledgers when it makes that final journey to the Promised Land, sitting on the shelf at an Apple store or warehouse.

So when the money goes around the leaky-piped Rube Goldberg machine, that’s alright! Through a series of mysteries, the money multiplies. You the worker get a tiny bit more (if it’s not a bad year and you’ve worked really hard and you didnt buy avocado toast etc), while a few people get all the rest.

If market participants aren’t feeling particularly jubilant, they must be compelled to act like they are so that the whole scam to keep running