Is there a historic precedent for Quantitive Tightening?
We have been at it since 2008 that means there is little historic data to draw any preemption from, we are on unchartered waters at this point.
What is unprecedented is hitting 0% interest rates nearly everywhere worldwide. When things hit this point, economies are forced to deleverage, to which economists refer to as an 'economic deleveraging'. National economies have gone through deleveragings in the past, and has so far played out in 3-4 ways:
-a period of high inflation (which sometimes lead to the collapse of the currency)
-a period of deflation (either via a bear market, or a rapid crash)
-a long period of almost 0 economic growth (stagnation - AKA 'the soft landing').
-some degree and combination of the above 3 scenarios.
In the past, reserve currencies died for many compounding reasons. QE is a novel scheme to prolong the USD's life as a reserve currency, and is only possible due to modern financial technology. It's definitely not sustainable and can only prolong the inevitable crash in demand for USTs as faith in Washington continues to wane globally. Kicking the can down the road.
https://en.m.wikipedia.org/wiki/Amsterdam_banking_crisis_of_...