The article <a href="https://www.wsws.org/en/articles/2021/03/13/ecb1-m13.html" source="WSWS" author="Nick Beams">ECB to accelerate supply of ultra-cheap money</a> describes the main reason the U.S.---and the world---economy doesn't seem to have noticed any downside in the last year and a half, despite the most devastating pandemic in living memory. <bq>It seems that whatever the state of the economy, the response of central banks is the same: pour more money into the financial system, <b>so that investors and speculators can continue to make vast profits on the basis of ultra-low interest rates.</b> When the economy is down, more money is needed to stimulate it. If it starts to grow, more money must be supplied to stop interest rates going up and damaging the recovery.</bq> <bq>The ECB statement said “preserving favourable financing conditions” was essential, and noted that “<b>market interest rates have increased</b> since the start of the year, which poses a risk to wider financing conditions.”</bq> What is the end goal here? Once an interest rate has gone down, it can never go back up? Or will we ever have the patience to wait out investors? The way they're talking, this is the new normal. No interest rates for anyone else, but money pumped into the financial markets. At the first sign of a change, pump it up again. There is no plan to get back to interest rates that benefit anyone but the already wealthy. The economy would have to somehow magically become "healthy" on its own, creating conditions under which it would be acceptable for interest rates to rise---because businesses were investing enough already. As it is, they don't invest because <i>no-one's buying anything</i> because people have no jobs and no money and can't go out anyway (and stores are restaurants are closed). Pumping into this economy just pours the money straight into the .01%'s coffers. <bq>Banks used the risk-free rate on bonds as the baseline for setting rates, and “sizable and persistent increases in these market rates,” if left unchecked, “could translate into premature tightening of financial conditions for all sectors of the economy,” it said.</bq> To translate for Lagarde, this means that <iq>unchecked</iq>, zombie companies would die and take down the zombie economy with it. Instead of letting any adjustment happen, they preserve the status quo. Somehow, this means that the companies don't just <i>survive</i> but <i>flourish</i>, making millions, if not billions, in profits. Instead of having a bad year, many of the most highly subsidized business had their best years ever. When policy turns a bankruptcy into lottery winnings for key players, that's all you need to know about how the world works. <bq>The inflow of money into financial markets from central banks, starting in the wake of the global financial crisis of 2008, and then accelerated in response to the pandemic, has created a mountain of fictitious capital, such that a rapid increase in market rates has the potential to set off a financial crisis.</bq> Although they pay lip service to maintaining a steady 2% inflation (for the ostensible purpose of keeping as close to full employment as possible), the ECB, just like the Fed, has other goals in mind. To whit, <bq>[...] if inflation were to reach the ECB’s stated target, it would completely ignore that, in line with its real objective of continuing to shovel money into the hands of the financial oligarchs, which, together with other central banks, it serves.</bq>