"Ain't no problem you can't solve by printing.... money! "
Monetary Policy has been one of the two pillars with also Fiscal Policy used to rescue the economy from the GFC and low/zero/negative interest rates have been the norm until the inflation shock of 2021-2022.
Beyond the setting of interest rates, Central Banks have ventured into unconventional methods in order for the financial systems to stabilize: quantitative easing, operation twist, government debt purchases, etc...
Markets have long recovered yet these ongoing policies are a mean for governments to fund GDP growth through the accumulation of public debts.
These policies have allowed GDP growth to keep going albeit at a very modest pace yet their main attributes are about addressing liquidity stress and boosting financial valuations.
Can these policies address a structural wave of deflation or a solvency crisis ?
In this section, we explore the benefits and the risks of such policies and we anticipate various scenarios going forward.
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