Central Bank Chief Says Monetary Policy Is Exhausted

END OF TIMES FOR CASH: “We’ve Reached The Limit”: Denmark Central Bank Chief Says Monetary Policy Is Exhausted. The world’s deepest and biggest monetary bubble ran from 1982 to 2007, when the private banking system finally ran out of enough worthy borrowers and collateral. Then central banks and government stepped in, keeping money creation growing a bit longer, with ever lower interest rates and a little quantitative easing. The world is now drowning in debt/credit.

But now a world recession is looming and central banks are already at zero or even negative interest rates. That tool is used up. If the governments and banks don’t create debt-free money (i.e. print) then the world will fall into a recession nastier than the 1930s. But if they do print then inflation will eventually recur, even while it reduces the debt to more manageable levels. Want to guess which way the politicians will choose?

This is going to affect everything and everyone. Big government and the welfare state were built on bubble money over the last three decades, but now it’s going to go into reverse in real terms.