"We are now in a situation in which central banks around the world are expanding their holdings of government debt. They are doing this by creating money out of nothing. That is what central banks do. So, there is the so-called race to the bottom. All the nations are inflating, so that their exporters will not suffer from an appreciating currency. Central bankers regard appreciating currency as a disaster. They are mercantilists."
"I think the central banks of the world are now trapped. I do not think they can go back to anything like the conditions in 2007 or earlier without creating a huge recession. I really do think there is what appears to be a race to the bottom. I also think that, before the bottom is reached in industrial countries, central banks will cease inflating. That is when we will get the Great Default. But, for the moment, the race is on."
No comments:
Post a Comment