QE1 and QE2 have not created wealth by replacing savings and hard work with speculation and food stamps. Stimulus is like taking water from the deep end of the pool, pouring it in the shallow end, and expecting the water level to rise. In this case, capital was taken from the real economy and poured into the political and speculative economies. You can see the result in vital signs of the real economy – unemployment stubbornly high, housing market moribund, weak GDP numbers, and this morning a lousy jobless claims number. You see the result in the DC economy – monster debt and deficits and the lowest unemployment rate in the country. And you see the result in parabolic moves in cotton, silver, lululemon, Baidu, et al.
~ Kevin Duffy, May 5, 2011