Quantitative easing as an antidote to Black Swan events

Unforeseen events are a part of our life. But the possibility of things which may appear to be remote or even outlandish may occur anytime. And when such events happen, they change the direction of the way we think or live our lives considerably. A case in the point is the recent widespread of the Coronavirus which has changed the way we work. Such unforeseen and extraordinary events are termed as Black Swan events. Finance professor and trader Nassim Nicholas Taleb made this expression popular through his books which cover this aspect in the most detailed manner. Black swan events have a deep impact on economies. Demand in key sectors of an economy is disrupted. And most experts and analysts find it difficult to forecast the direction of demand. In such delicate situations, central bankers have been unanimously following the strategy of quantitative easing (QE), which began in early 2009. QE has had a deep and lasting impact on asset prices which have a direct beating on the underlying health of the global economic engine. So, what exactly is “quantitative easing” and how does this affect “investors”? Let us understand these nuances:  


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