The Japanese central bank recently unleashed a massive quantitative easing program. In simple parlance, money printing worth US$ 1.4 trillion! The Japanese Prime Minister believes money printing will end more than a decade of deflation, that is, falling prices. The money pumped will lead to inflation and this in turn would revive investments and spending in the economy. This is his plan to get the Japanese economy going.

This may appeal to some in theory. But we have always been extremely skeptical of such monetary policies. Such financial steroids have adverse long side-effects. The failure of the QE program in the US should have been a lesson.

But it seems such policies do benefit someone. No, it's not the economy. Not consumers. Not savers. Any guesses? The answer is investment banks! An article in Bloomberg notes that investment banks have been the biggest beneficiaries of the stimulus program. With stock and bond markets soaring, these banks are buzzing with activity.

This is not uncommon. The banks that were responsible for creating the 2008 financial crisis have been the biggest beneficiaries of all the bailout and stimulus programs that the US Fed initiated. And now it is Bank of Japan that seems to be following similar footsteps. Whose interests are policymakers really trying to protect? It doesn't seem too difficult a question.