Rock-a-bye baby, on the treetop,
When the wind blows, the cradle will rock,
When the bough breaks, the cradle will fall,
And down will come baby, cradle and all.
Why is a song about a severely injured baby and smashed cradle sung to children at night to lull them to sleep? Apparently, because If you sing this popular lullaby often enough the nonsensical violence in the storyline fades and the rhythmically appealing sounds endure.
A similar contradiction is apparent when it comes to central banks and quantitative easing (or money printing). Historically regarded as a desperate act that risked unleashing a currency collapse, money printing is not a vocation that central bankers usually aspire to. However, after years of experimenting with increasingly extravagant QE jingles, today money printing is the soothing melody that tucks investors in at night.
“Central banks have saved the day! – So why not keep printing anyway?”