The World Is Out of Monetary Weapons

The World Is Out of Monetary Weapons

By Mark O’Byrne October 27, 2016 0 Comments

Satyajit Das has written an excellent article in Bloomberg which clearly details the risks facing the global financial and monetary system and how central bankers are out of monetary ammunition and weapons.

NOT A BAD PLACE FOR IT. PHOTOGRAPHER: ERWIN WODICKA/ULLSTEIN BILD/GETTY IMAGES VIA BLOOMBERG

Excerpt:

“No one likes to admit defeat. But global policymakers, who continue to insist that there’s more they can do to revive growth and inflation, are starting to sound like Monty Python’s Black Knight (click link to see video), the limbless and mortally wounded warrior who threatens to bleed on his victorious opponent. The truth is that governments and central banks have very few weapons left — and have probably lost any chance they once had of averting a prolonged stagnation.

Secular Stagnation

Clearly, the real economy hasn’t responded as hoped to zero and now negative interest rates. A whole host of factors continue to depress personal spending — high debt, stagnant incomes, unemployment and under-employment, and economic uncertainty. Even the rich, who have benefited immensely from the runup in asset prices, can’t really spend much more than they already are.”

Satyajit Das is an Australian former banker and corporate treasurer, turned consultant, author and academic. His latest book is “A Banquet of Consequences” and he is also the author of “Extreme Money” and “Traders, Guns & Money.”

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