As governments and central banks around the globe promise to do whatever it takes to save economies, and life as we know it, from the COVID-19 virus, the pertinent question is not whether they will succeed, for succeed they surely will.  The health crisis will pass, thanks to vaccines and improved treatments — and, thanks to quantitative easing (Q.E.), the economic consequences of COVID lockdowns can be managed.  For there is now no limit to how much central banks can print and governments spend.

The far more interesting question is, "What will we be saving?"

Will it be the life we had before the virus struck?  A world dominated by quantitative easing, where near-zero interest rates punished savers and rewarded speculators?  Where homes were unaffordable to most young buyers?  Where full-time jobs were hard to come by, and costs of living rose faster than wages?  Where many self-funded retirees earned less income than those on a pension?  Where wealth inequality grew daily?  A world dependent on never-ending growth, stimulus, and debt?  Where government deficits didn't really matter?  Where the most important free market, the price of money, was blatantly manipulated lower by money-printing central banks buying up government bonds, distorting asset prices, and promoting reckless financial behavior?

Or will it be the life that is coming once the virus has passed?  A new world, much like the old world, except government debt is way higher with huge, ongoing budget deficits, as governments are expected to bankroll every "worthy cause"?  Money-printing on a jaw-dropping scale as central banks fund deficit spending by purchasing bonds?

Society will change, not for the better.  Why save or set aside for rainy days?  Why should we repay debt if our government doesn't?  Why work when speculation (cryptos, NFTs, property, meme stocks) pays handsomely?  Will there be enough incentive left to study and learn?

Image: Printing money (edited in befunky).  YouTube screen grab.

Why are we in this dire situation?  The virus will be blamed, but it is not the culprit.  It's just exposing the flaws in our financial system and accelerating our progress toward an inevitable day of reckoning.

Nature requires balance.  Tamper with it at your peril.  Interest rates are not at all different and should be low enough to encourage investment while remaining high enough to punish poor decisions.  Only free-market forces can achieve this.

Quantitative easing is a financial virus as well as a wolf in sheep's clothing.  It infects economies but is cunning, initially acting like an antibiotic as it boosts debt, spending, and asset prices, while quietly destroying the free-market forces that are key to capitalism's immune system.

Remove it, and the host gets very ill, as interest rates rise; asset bubbles deflate; and insolvencies, defaults, and job losses follow.  But to avoid these consequences, ever greater doses of the virus must be administered, ultimately resulting in a far worse, potentially terminal outcome: out-of-control inflation.

So, as we deal with and ultimately overcoming the COVID-19 virus, let us not forget that a far more dangerous virus remains: the Q.E. virus, unleashed on us by the very same "white knights" who claim they are saving us.  The consequences are going to be far more damaging than COVID-19.

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