[vkou]

> There are people who have worked like crazy their whole lives and they just had their hopes and dreams set on fire by runaway money creation and the resulting inflation.

Would they be happier under a repeat of 2008 or 1928 instead?

[kipchak]

I would figure from a self interested perspective a repeat of 2008 would be pretty advantageous to an aspiring homeowner. Home prices peaked at $262,600 median in March 2007 and bottomed at $205,100 in March of 2009.[1] Rates were even about a % lower in 2009.[2][3]

Of course if the hypothetical aspiring homeowner with excellent market timing lost their job the point would be moot, but if their income stayed the same and they put 20,000 down their monthly payments would have gone from $1,302 to $994.

[1]http://www.fedprimerate.com/new_home_sales_price_history.htm

[2]https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Reports-...

[3]https://www.marketwatch.com/story/us-mortgage-rates-hit-2007...

[vkou]

Is it pretty advantageous to new retiree who has followed orthodox investment advice, and has started to live off their investments, only to see the value of half of them crash? Even if they recover in six years, they have still lost a mountain of principal in the meantime.

Is it advantageous to a new graduate who will see no work, and maybe a decade of depressed wages (which, between loans and compounding interest in savings, is devastating to their future prospects)?

Is it advantageous to a new homeowner that just lost their job?

Some people got burnt by that flood of money that stabilized the economy. Some people benefited. Some people avoided harm. Focusing on the first group without regard for the latter is missing a large part of the picture - which was that the economy as a whole remained more or less stable through this crisis.

[kipchak]

For sure, some people will benefit from such policies and some people wont. My figuring is that those in the parent comment's category of "middle class and saving for a home" are probably not in the camp of those benefiting from current policies (holding cash). Those policies are, what I can tell, keeping valuations high instead of raising rates, and providing an incentive not to hold cash and instead purchase and invest.

Whether that's fair vs protecting those who already have homes and other assets is I suppose a different question. I agree things have remained fairly stable so far as the result of printing but I suspect we likely haven't felt it's effects yet and the stabilization will continue well into the next year, though the future is always fickle to predict.

[01100011]

Wouldn't a prudent retiree have exited the market and experienced gains in their bond backed portfolio?

Right now we're fueling a tsunami of moral hazard which will eventually bite us in the ass anyway. We're just prolonging the inevitable and making the crash even worse when it finally appears.

[vkou]

Investment orthodoxy recommends having ~50% stocks if you are retiring at 65, and are planning on living past 80. Cash/bonds lose value too fast.

As for punting the problem back, no, that does not follow as a required consequence of QE.