When Rwandan bonds are yielding below 8 per cent, Indonesian sovereign debt swings 150 basis points and the Indian rupee oscillates wildly in a matter of weeks, while every day the US equity market sets new highs, (despite lacklustre earnings growth which continues to be driven largely by cost-cutting), some people might conclude that markets are volatile and bubbly. Clearly, though, both the current Federal Reserve chairman Ben Bernanke and Janet Yellen, nominated to succeed him, are not among the worriers.

Ms Yellen’s remarks, prepared for her confirmation hearings last week, contained no hint of tapering. That underscores the Fed’s obsessive fear of the negative wealth effect of any slowdown in asset purchases and a move towards higher interest rates. Five years after the meltdown, it is clear the Fed’s quantitative easing is not about a real economic recovery, it is only about generating the liquidity that gives rise to asset inflation and wealth-led growth. Or super wealthy people-led growth since wages and incomes for the rest of us are not rising at all.

Despite the failure to restore growth all these years later, the Fed’s response is to keep ramping up, reflecting an assumption that growth can return to its former speed of say 3 per cent a year. But many analysts believe potential growth is coming down. They say the assumption in the Fed chairman’s office that the economy is performing below its trend, like some intractably ill-behaved child, looks increasingly doubtful.