Why aggressive monetary easing is pushing on a string

Financial Times/Richard Koo

Image of red Japanification eclipsing globe“The fear of “Japanisation” has, once again, prompted monetary authorities on both sides of the Atlantic to consider additional monetary easing — but for all the wrong reasons. The extended periods of slow growth and low inflation seen in Japan since 1990 and in the west since 2008 are caused by the disappearance of borrowers, not by the lack of lenders.”

USAGOLD note:  Richard Koo is the chief economist for the Nomura Research Institute and a highly respected commentator on the Asian economic scene.  This article goes to the heart of what’s wrong with current interest rate policies around the world.  It supports the argument that the economy of the future is the economy of today – one pushed by a disinflationary bias that has become progressively more difficult to turn around and the difficulties associated with ‘pushing on a string.’

Repost from 9-11-2019

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