Anthony Rowley

The world’s free-spending, money-printing spree will cost us dearly in the end

The world has mortgaged its economic and monetary future to uncertainty in the hope that the global economy will come roaring back after the pandemic

In reality, the cost of these well-intended but ultimately irresponsible policy actions could be inflation, financial crisis and a deeper recession

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US Vice-President Kamala Harris hosts a virtual town hall on the US$1.9 trillion American Rescue Plan at the White House on February 18. Government aid is needed but, dangerously, coincides with a growing acceptance of “magic money”. Photo: Reuters

Anthony Rowley

Published: 1:30am, 22 Feb 2021Updated: 1:32am, 22 Feb 2021

Bravery can be difficult to distinguish from foolhardiness until the consequences prove the action to be coolly courageous or rash and recklessly bold. So, does unlimited fiscal and monetary stimulus signal an entry into a brave new world or a foolhardy plunge into disaster?

Everything points to the latter. The spectacular blow-up in stock prices is matched only by an explosion in debt while fiscal and monetary stimulus is heading into space. Inflation warnings are flashing even as upstart cryptocurrencies threaten to displace gold as stores of value.

It seems we are intent on shedding all traditional economic and financial anchors at the same time and setting sail upon a sea of change and uncertainty with few or no navigational aids. To end up in anything other than a shipwreck would be little short of a miracle.

The world has mortgaged its economic and monetary future to uncertainty in the hope that the global economy will come roaring back after the pandemic. In reality, the cost of these well-intended but ultimately irresponsible policy actions could be inflation, financial crisis and a deeper recession.

The International Monetary Fund has acknowledged that the US plan for an additional US$1.9 trillion of fiscal spending has raised concerns about an overheated economy that could push inflation well above the comfort zone of central bankers. While this is unlikely, such concerns cannot be ignored, said the IMF.

The world’s free-spending, money-printing spree will cost us dearly in the end

The world has mortgaged its economic and monetary future to uncertainty in the hope that the global economy will come roaring back after the pandemic In reality, the cost of these well-intended but ultimately irresponsible policy actions could be inflation, financial crisis and a deeper recession

The world has mortgaged its economic and monetary future to uncertainty in the hope that the global economy will come roaring back after the pandemic

In reality, the cost of these well-intended but ultimately irresponsible policy actions could be inflation, financial crisis and a deeper recession