David Rosenberg: Banks Matter Less And Less

Quantitative easing has been controversial for plenty of reasons, but one of the objections that could still rear its ugly head is that it is covering up deflationary trends that will put pressure on growth once tapering begins. If the Fed relaxes monetary policy in response, we could get stuck in a ‘QE trap’ with no clear way out, as prominent analysts like Richard Koo and Christopher Wood have recently argued. But Gluskin Sheff chief economist and strategist David Rosenberg thinks that looking at monetary velocity is misleading, and that what’s really happening is a move away from bank loans….