I happened to be in a room full of bankers when the announcement came through that the ECB was about to create more cheap credit. Many of them were visibly pleased. That alone shows something has gone very wrong with our banking system.
Low interest rates and cheap credit bring forward spending from tomorrow to today. The problem is that when today becomes tomorrow, we'll have nothing left to spend. As Mervyn King puts it in his brilliant new book, we are digging deeper and deeper into tomorrow's demand.
One of the reasons the West's long-term GDP outlook is falling is the huge glut of chronic malinvestment that comes from manipulation of the money supply. Cheap credit is like cholesterol in the arteries of the economy. The West is already wheezing; if we carry on like this, we're heading for an economic heart attack.
The credit boom hasn't just inflated asset prices and enriched bankers. It has also laid an economic time bomb. Think of all the insurance firms and pension funds that rely on returns from low-risk assets. Because of ultra-low interest rates, they won't be able to provide the yields that millions of people are relying on in 10 or 20 years' time.
The fact this latest injection of credit comes from the European Central Bank is especially concerning. One of the only good things you used to be able to say about the euro was that it was managed less recklessly than the pound. When the euro was run like the old deutschmark, at least it had rigour. Today's euro is the worst of both worlds. No discipline, but more austerity.
Candy floss credit got us into this economic mess in the first place. We won't get out of it unless we restore sound money.
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Printed by Douglas Carswell of 61 Station Road, Clacton-on-Sea, Essex