Macroeconomics. Central banks are "creating" a trillion here, a trillion there, like nobody's business. But what are the consequences? What is the thought process that central bankers have gone through to make these decisions? Also why, exactly, are they buying the exact assets that they are buying (govt. debt, high-yield bonds, etc..) and why not others (e.g. stocks or put money into startups)? And then, what happen…
- Assets that they are buy? The idea is to keep the banking system solvent and to prevent a domino effect where the liquidation of one big bank will result in a run on other banks. The big banks got into trouble because they took depositors money and invested in junk which went belly-up. The federal government insures everyone's bank deposits; if the banks went bellied up the FDIC would have to pay out. Better that the banks stay solvent.
- There are cases like Greece defaulting on its international loans. The EU forced Greece to agree to an austerity plan lowering Greece's payments if Greece changed its national spending which is deeply unpopular in EU and Greece. But there is no other alternative. Well the alternative is what happened to Weimar Germany after WWI: hyperinflation, economic destruction, and the longing for a savior.