There are very few advantages in quantitative easing to the bulk of the lower classes and in particular the prudent within all classes. There are however substantial advantages to the banking sector, recklessly overborrowed governments, recklessly overleveraged businesses and recklessly overborrowed individuals.
With the exception of the heavily German influenced ECB, central banks believe deflation is the problem, whereas in reality deflation is the solution.
Credit expansions such as that experienced between 1982 and 2007, essentially transfer wealth from the poor to the rich. This is because the rich have the political skills to be able to borrow money early and ride up the speculative booms in real estate, equities, bonds etc. The driving up of house prices in particular is a major problem, as the cost of rent or recently procured debt to pay for a house means money is sucked from the lower classes into the hands of landlords and bankers.
Eras of credit expansion also coincide with reduction of the taxation burden on the rich to relatively low levels, which mean much larger tax burdens fall on the poor in regressive taxation such as VAT and National insurance.
Deflation returns the money to the poor by reducing the prices of shares, real estate etc, which are largely owned by the rich. The cost of living falls due to the deflationary effect of too much productive capacity being built when credit was easy and for those from the middle class and lower classes who keep their jobs, their wages fall less fast than their cost of living. There is a problem with large unemployment though and so money is returned rather unevenly to the lower classes.
Quantitative easing has by a large been introduced to fund the US and UK government deficits, because if they had to fund them out of existing money, interest rates would need to rise substantially. Interest rates actually need to rise to force overleveraged businesses into bankruptcy. This transfers productive capacity from the incompetent who can not make a profit due to their debt burdens, to the competent who can buy the businesses up for 20 cents on the dollar and run those businesses with much smaller debt burden. They can then run them profitably and employ people, At the moment margins have been squeezed as they always are at the end of a credit expansion and many businesses are being kept alive by direct or indirect subsidies from the government (QE being an indirect method). This particularly applies to the banks. Quantitative easing sets back the liquidation of the banking sector which is a necessary part of the process of recovery - the QE goes straight to the banks who then bid up the price of commodities and equities etc as it would be stupid to lend it out with so many businesses and individuals so overburdened with debt.
Most people believe QE will cause runaway inflation and that is probably going to be the case in the long run, but in the short run it doesn't. This is because it pushes up CPI inflation without pushing up wages and so real wages fall and more people default on their debts, which causes credit contraction and ultimately deflation. There is so much downward pressure on middle and lower class wages in Britain and America, wage inflation is not likely and this is really the only way people will pay there debts.
QE is problematical for countries that don't indulge in this blatant abuse. Money flows to these countries in search of yield and results in specultaive mania in certain asset classes, which largely destabilises their economies. They then have two choices, either they indulge in QE themselves (as Japan has recently been doing) or they bring in capital controls in a wave of protectionism. Protectionism is unfortunately the prelude to war.
I expect QE to be abandoned and those who advocate it to be ridiculed. It is often said that Governments do the right thing only after exhausting every other possibility. QE is the last possibilty short of Weimar style inflation, which I do not expect. So with QE withdrawn, the required liquidation can occur and this whole mess can be sorted in a equitable manner.
