But there’s unease, along with all the euphoria. The current economic cycle is already the longest in U.S. history and a recession looks inevitable in the new decade — which also will mark 100 years since the Wall Street crash of 1929.The BUSINESS NEWS article. The central bank solution is the same central bank solution we have used for 250 yeas. The Fed will help the government through a partial default. Every generation does it, it is no surprise, it is not a problem, it is a semi-regular event we all know about and prepare for.
And solutions may need to be unconventional, even more so than the extraordinary policies of negative interest rates and bond-buying that eased the post-2008 global funk.
With those policies maxed out, “in the 2020s it seems inevitable that a world of helicopter money awaits,” Deutsche Bank predicts.That would entail central banks or governments providing citizens with large amounts of money, as though it was being dropped from helicopters, a strategy rejected even by the unorthodox policymakers of the 2010s.Another radical option under discussion is modern monetary theory, when governments create and spend as much money as needed, so long as inflation stays low.“Central banks have effectively invited governments to experiment with more unconventional policies,” Deutsche said. However, those policies may pile up even more global debt, already at record highs.
Saturday, December 28, 2019
The world did not start in 2000
Expecting 2020:
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