Thank you, Alan, for this insightful and thought-provoking article. Without meaningful fiscal consolidation, easier monetary policy risks exacerbating stagnation rather than fostering sustainable growth
This is a great “vista" onto the dilemma we are facing, and I like the great quotes you braided into this piece.
We are looking at the prelude of the upcoming big clash between government(s) and central bank(s). Russell Napier just called his latest piece "The Anguish of Central Banking 2" (after what happened in the 1970s).
He quotes Arthur Burns after he had left the Fed (speech in Belgrade, 1979):
"… And yet, despite their antipathy to inflation and the powerful weapons they could wield against it, central bankers have failed so utterly in this mission in recent years. In this paradox lies the anguish of central banking."
Thanks Brigitte. Yes Burns' speech had the same title and is worth a read. Although Burns was widely blamed for his weak stance on inflation his point was that the political and institutional support did not exist at the time to really tackle inflation (much like now the political momentum does not exist to tackle deficits).
Thank you, Alan, for this insightful and thought-provoking article. Without meaningful fiscal consolidation, easier monetary policy risks exacerbating stagnation rather than fostering sustainable growth
Thanks Lei Qiao
This is a great “vista" onto the dilemma we are facing, and I like the great quotes you braided into this piece.
We are looking at the prelude of the upcoming big clash between government(s) and central bank(s). Russell Napier just called his latest piece "The Anguish of Central Banking 2" (after what happened in the 1970s).
He quotes Arthur Burns after he had left the Fed (speech in Belgrade, 1979):
"… And yet, despite their antipathy to inflation and the powerful weapons they could wield against it, central bankers have failed so utterly in this mission in recent years. In this paradox lies the anguish of central banking."
Thanks Brigitte. Yes Burns' speech had the same title and is worth a read. Although Burns was widely blamed for his weak stance on inflation his point was that the political and institutional support did not exist at the time to really tackle inflation (much like now the political momentum does not exist to tackle deficits).
Yes, exactly, only that now the obstacles and stakes are even that much higher.