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QE-Forever Cycle" Means Catastrophe Is eventually Inevitable

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the global economy may now be trapped in a QE-forever cycle," confirming von Mises prescription that "there is no means of avoiding the final collapse

 

 

 

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Financial markets are now haunted by high debt levels which constrain demand, as heavily indebted borrowers and nations are limited in their ability to increase spending.

In the absence of growth and inflation, the only real alternative is debt forgiveness or default. Savings designed to finance future needs, such as retirement, are lost.

If the average interest rate is 2 per cent, then a 300 per cent debt-to-GDP ratio means that the economy needs to grow at a nominal rate of 6 per cent to cover interest.

 

 

https://next.ft.com/content/4905707a-57af-11e6-9f70-badea1b336d4?siteedition=intl&_ 

Edited by midas

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