Next weekend, the central bankers of the world meet in a slimmed down COVID annual jamboree at Jackson Hole, Wyoming US. The bankers will hear from Fed chair Jay Powell and US Treasury secretary Janet Yellen and wade though academic papers commissioned from various mainstream ‘monetary economists’.
The big issue is whether it is time for central banks to wind down on their purchases of government bonds and bills designed to pump credit money into economies, which had the aim of avoiding a meltdown of businesses during the pandemic slowdown. In the COVID year of 2020, the Federal Reserve made purchases equivalent to 11% of US GDP, the Bank of England 14% of UK GDP and many other banks in the G7 of around 10% of national GDPs.
These purchases are called ‘quantitative easing’. Instead of lowering interest rates to encourage borrowing, since the onset of the…
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