A QE World vs a Normal World

Over the past 5 years we have talked a lot about the QE program which Bernanke started and Yellen continued and is afraid to end.  And to make things worse, Central Bankers around the Globe have aped the movement.  I don’t think anyone has a real idea how this will end.  Few politicians or government officials have the guts to end it, does that mean it will take an accident to change things? 

For me it is very simple and clear cut on the differences between a QE Economic Environment and a Normalized Economic Environment.

In the current QE Environment in the US you see the following:

1. Strong Stock Markets
2. Low short term growth GDP
3. Rising Inequality
4. Weak Dollar
5. Low Bond Yields
6. Interest rate inbalance between small and large borrowers
7. A declining consumer demand curve

In a Normal Economic Environment in the US you would see the following:

1.  Stock markets which relate to real growth

2.  Stronger long term GDP growth

3.  Decreasing Inequality

4.  A stronger Dollar

5.  Rising Bond yields to benefit savers

6.  Balance on interest rates between small and large borrowers

7.  A rising consumer demand curve

Everyone knows that the switch between the two polar opposites will be somewhat painful, and so Washington is trying to sit on its hands as long as possible.