The Treasury Put Will Turn Investing On Its Head | ZeroHedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
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For the years following the Lehman crisis, the Fed put was the norm. Exceptionally loose monetary policy ensured risk assets had a safety net. But central banks were unable to rehabilitate the real economy while governments kept their belts tight. That belt began to loosen in the years leading up to the pandemic, and then snapped altogether during it.
Fiscal and monetary policy were now working hand-in-glove. Governments rewrote the rulebook on what they would backstop: jobs, businesses, consumption - nothing was seemingly outside its remit. Creating money is one thing, but to have an impact on the real economy it must be spent, and governments fulfilled that role in spades. Finally, the full force of monetary expansion was realized.
The pandemic and its effects have now largely faded, but the fiscal deficits remain. With economies now more reliant on government spending, and the electorate’s ever-higher expectations of what their governments should shield them from – job loss, ill health, high energy prices, even death – it is becoming increasingly difficult to see how sovereigns can rein deficits back in to pre-pandemic norms any time soon.
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but to sum it up for the sheep.
JUST THE TIP.
