[quote=FlyerInHi]
They, meaning governments, should develop policies to put that money to productive uses. But it’s not like “they” are all in agreement and all act in unison.

So what are central bankers to do? They can only act within their domain.

CAr, the “they” that you refer to requires coordination between monetary and fiscal policy. Not possible because of politics and ideology. It also requires a new world order.[/quote]

They, meaning the central bank, should do nothing for exactly the reason you state above. Since, they can’t control where the money goes, they should let the bad debt liquidate. They can lower the interest rates but they can’t make people borrow it for productive uses. As the rate of interest approaches 0 there’s an increased incentive to speculate rather than invest. If you have to borrow at 10% you aren’t going to be using the money to buy back stock, but you will borrow if you actually have a smart productive idea.

Granted there’s a ton of people via various retirement accounts that really really need asset prices to remain inflated.