The West’s beancounters are guilty of a great white lie
By pushing the QE experiment too far, central banks have tainted the whole apparatus of emergency money
Western central banks are guilty of an enormous white lie. They led the public and the political class to believe that quantitative easing (QE) was tantamount to printing money, and that it could be reversed painlessly once the deflation threat had passed.
They were throwing sand in our eyes. The process is not remotely equivalent to printing bank notes. The central banks have conducted QE in such a way that there is a liability owed to commercial banks on the other side of every bond purchase. That liability is contracted at floating rates.
The US Federal Reserve, the Bank of England, and the European Central Bank, among others, have borrowed short to buy long. This is a variant of the maturity mismatch that blew up Northern Rock and Lehman Brothers after the short-term funding markets froze during the global financial crisis.......
https://www.telegraph.co.uk/business/2022/11/07/whoops-central-banks-may-soon-need-gigantic-bail-out/
I cannot vouch for the value of AEP's analysis (and he's usually pretty gloomy) but it would help explain why, for example, BoE seem very keen to QT (edit: and also seem loath to increase interest rates). I would be very interested (and grateful) if anyone here could critique or elaborate - the arguments are well above my economics pay grade.
(I recently came across a reddit forum called 'Explain it like I'm five' )