If we are collectively successful, uncertainty will start to turn into confidence, and then a real recovery can begin. 1 See Anderton, R., Jarvis, V., Labhard, V., Morgan, J., Petroulakis, F. and Vivian, L. (2020), “Virtually everywhere? Digitalisation and the euro area and EU economies: Degree, effects, and key issues”, Occasional Paper Series, ECB, forthcoming. 2 European Commission (2020), “Identifying Europe’s recovery needs”, Staff Working Document, (2020) 98. 3 Anderton et al. (2020), op. cit. 4 Perez, C. and Murray Leach, T. (2018), “A Smart Green ‘European Way of Life’: the Path for Growth, Jobs and  Wellbeing”, Beyond the Technological Revolution Working Paper, 2018–01. 5 In terms of revenues. See: ec.europa.eu/environment/ecoap/indicators/socio-economic-outcomes_en 6 ECB (2020), The international role of the euro, June. 7 Sondermann, D. (2016), “Towards more resilient economies: the role of well-functioning economic  structures”, Working Paper Series, No 1984, ECB, November. 4/4  BIS central bankers' speeches
Here is a rather pungent quote from a note he sent out on Jan. 2: “…QE [quantitative easing] puts beer goggles on investors by creating a line of sight where everything looks good…” For those of you unfamiliar with the term “beer goggles”, the Urban Dictionary defines it as “the effect that alcohol … has in rendering a person who one would ordinarily regard as unattractive as … alluring”. This audience might substitute “wine” or “martini” or “margarita” for “beer” to make it more age-appropriate, but the effect is the same: Things often look better when one is under the influence of free-flowing liquidity. This is one reason why William McChesney Martin, the longest-serving Fed chairman in our institution’s 100-year history, famously said that the Fed’s job is to take away the punchbowl just as the party gets going.2 … and the eye of the needle The other eye catcher for me was a cartoon in the Jan. 6 issue of The New Yorker. Sitting in a room are two businessmen who are apparently conversant with the New Testament’s book of Matthew. One says to the other, “We need either bigger needles or smaller camels”. Today, I want to muse aloud about whether QE has indeed put beer goggles on investors and whether we, the Fed, can pass the camel of massive quantitative easing through the eye of the needle of normalizing monetary policy without creating havoc. Free and abundant money changes perspective Boockvar is right.