Home International Finance: Decentralised QE

GEAB 132

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 Feb 2019

International Finance: Decentralised QE

Have you noticed that all the efforts to regulate debt, derivatives, banks etc., made following the subprime crisis and meeting with varying degrees of success over the last ten years, are currently systematically undermined, including by the most serious players in the financial system? Here are some examples:

On the public debt side, the United States has just crossed the $22 trillion line, only one year after crossing the $21 trillion line,[1] clearly abandoning any attempt at reduction.

The yellow jacket crisis forced Emmanuel Macron to sign a cheque for 11 billion euros in support of purchasing power, not to mention the expenses incurred by the demonstrations and various damages, raising the French deficit from the 2.8% of GDP originally forecast for 2019 to 3.2% or 3.4% – that is 0.2 to 0.4 points above the European legal limit.[2]

Of course, there is also Italy, the third largest economy in the eurozone and one of the most indebted countries in the world (fourth position, 132% of GDP), whose ‘populist’ government, whilst having a country to run, does not intend to abide by the austerity injunctions imposed by higher authorities (Europe, Germany, IMF…), preferring to consider selling its gold reserves or to question the sacrosanct independence of its central bank.[3]

And then there is Japan with 10 trillion debt of its own, or $79,000 per capita, a country which will issue another $296 billion of government bonds at the end of its fiscal year at end of March.[4]

The United States, Europe, Japan: who can afford to give lessons to whom about sound financial management? 

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