This week, following the fifth anniversary of the Lehman Brothers' bank collapse, world stockmarkets reacted with relief at news that the United States economy will remain on the life support of new money printed by the US Federal Reserve. A gradual withdrawal of "quantitative easing" had been expected since May when Fed chairman Ben Bernanke said the US was showing signs of strength and he might start reducing the stimulant later in the year.
This week, he announced he had changed his mind. Any relief at this decision is extremely short-sighted. Five years is a long time for the world's largest economy to depend on a monthly injection of US$85 billion ($101.47 billion). Whenever this drip is withdrawn the patient is likely to suffer some pains of adjustment such as those that have caused Mr Bernanke to change his mind.
Sooner or later it will have to be withdrawn. There are fears even the strongest of economies cannot keep printing currency at this rate without building inflationary pressure that will find a release in consumer prices or another bubble in asset values. The longer this goes on, the greater that pent-up pressure may be.
Mr Bernanke is a scholarly expert on the Great Depression. That knowledge was no doubt useful when the global financial crisis struck in 2008. Lehman was not the first Wall Street bank to suffer but it was the first not to be rescued.
Its collapse sent the financial system into a seizure, inviting comparisons with the crash of 1929 and the depression that followed.
The lessons of the 1930s have been conscientiously applied. Governments have run budget deficits and central banks, having lowered interest rates as far as they could, have been buying their country's bonds with money they can create. But the prescription is proving a great deal easier to apply than to end. In theory, the economy recovers under the stimulant and hardly notices its withdrawal. In practice, dependence is making it hard to recover.
New Zealand is lucky not to have needed quantitative easing, with low public debt, a budget recently in surplus and relatively high interest rates when the crisis struck. It had room to lower interest rates, run a temporary deficit and keep its head above water. Even last summer's drought has not damaged the recovery as much as expected in the measured quarterly growth announced this week.
But we're not immune to decisions of the US Federal Reserve. The NZ dollar was among currencies that rose against the greenback after Mr Bernanke's move, penalising exporters from this country. More generally, of course, all economies languish while the world awaits a genuine recovery in the US and Europe.
Five years is surely long enough for any form of life support to prove its worth. It's time for some new thinking at the Fed. Unfortunately that seems unlikely when Mr Bernanke's term ends this year. His likely successor, deputy Janet Yellen, is of like mind. Her only rival, Lawrence Summers, a former adviser to President Obama, withdrew this week fearing congressional rejection.
But something has to change.US and foreign business probably won't invest in a recovery until they see the money supply is normal and the economy can stand on its own feet.