Opinion | How the US Federal Reserve created a financial opioid crisis in the West
- By targeting asset prices to bolster the economy, the Federal Reserve is again creating an asset bubble. The US central bank’s loose monetary policy, more than China, is really to blame for the US’ troubles now
Until an effective vaccine is found, which could be years away, social distancing is likely the new normal. Parts of the global economy, like tourism, will remain shut and others like catering and entertainment must severely reduce their operating capacity. A rebound is unlikely, and the global economy’s capacity might be reduced by 10 to 20 per cent.
With high investment and low productivity, the current tech darlings are looking more like tech Kardashians. Tech mania is now fuelled by star power; knowing how to tease is half the battle.
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Tesla starts delivery of made-in-China cars
However, the other half of the equation would be the supportive monetary environment. After all, the tech Kardashians need money to keep the lights on. This is where the Federal Reserve comes in; it has explicitly targeted asset prices to hold up the economy.
