Daniel Lacalle – Escape from the Central Bank Trap
De centrale banken zijn in het afgelopen decennium door een periode van ongekende monetaire expansie gegaan. Wat zijn de risico’s?
Daniel Lacalle schreef een boek over de vraag: wat nu?.
The unprecedented monetary expansion we have witnessed in the past years is on track to put the balance sheet of some of these central banks at 20% to 100% of the GDP of their countries. Massive monetary stimulus and more than 600 interest-rate cuts have been drivers to support a global recovery. But the risks cannot be underestimated.
Extreme easing has the objective of combating the risk of deflation and supporting growth, but excessive liquidity has unintended consequences: weak growth, poor productivity, and low inflation.
Cheap and abundant money perpetuates overcapacity, which exceeds 25% in the main economies of the OECD, by keeping highly indebted, low-productivity sectors “zombified” through perennial refinancing of non-performing loans. Money is cheap, and many sectors that generate returns well below the cost of capital simply survive thanks to cheap debt, but fundamentals remain poor. Additionally, weak growth comes from the combination of excess debt, which has soared to 325% of global GDP according to the IIF; while consumption, commerce, and internal demand remain disappointing because the tax burden has risen to all-time highs, according to the OECD.
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Publicatie 8 december
“Escape from the Central Bank Trap” is available now on my Amazon Page.