EDITOR, The Tribune
Since September 2019, the Federal Reserve has been buying 80% of US Treasury debt. The US is borrowing from itself – unprecedented. The attack on the Abqaiq oil facility in Saudi Arabia in September 2019 that affected global oil supplies significantly barely increased oil prices. The killing of the Iran general by the US on January 3, 2020 barely influenced oil prices. The markets are not being influenced by threat to Middle Eastern oil.
Since the global financial crisis of 2008, central banks globally have been buying their government debt and this exceeds the total global growth. A growing economy has been bought by monetizing debt which was not bought by real buyers. It’s like paying off a credit card with a credit card.
The world economy is not normal. Japan, the European Union, Sweden and Denmark have experimented with negative interest rates which is unprecedented. According to the World Bank, the world economy will grow by 2.5%, up from 2.4% in 2019 the weakest since the global financial crisis in 2008-2009.
The Central Bank of the Bahamas kept its interest rate at 4% (historic low). A low interest rate environment improves financing capacity for all. Low interest rates encourage both consumption and investment and offset a drop in imports caused by a depreciating foreign exchange rate. Why is the Bahamas’ and the global growth rate so low? This defies logic. Something is not right.
BRIAN E PLUMMER
Nassau
January 13, 2020
Comments
Porcupine 5 years, 2 months ago
No Brian, the answer is right in front of you. There has been great growth in the amount of money going to the wealthiest on earth. Those who produce nothing, they only manipulate numbers. As the bankers do, as the owners of corporations do with their buy backs and mergers and acquisitions. As the politicians do with their political favors. Do you honestly believe that the numbers boys don't influence our elections and policies? How about the gambling referendum? The economy has been working spectacularly for the very wealthy. They have seen tax breaks, artificially inflated corporate earnings, massive subsidies, and wages depressed on a global scale. The elites do not give a damn about the rest of the world. Hell, they do not even care if the living world shrivels and dies, as it certainly is now. You think they do not know these facts? Brian, I used to ask these same questions myself. How could things be going so wrong with all the brains and resources there to solve them? Then, I realized that things are going spectacularly well for those who make the laws and control the politicians. Those who control our lives are doing just fine, thank you very much. The only lie is that those in power care about the rest of us. They don't. Get used to it.
Well_mudda_take_sic 5 years, 2 months ago
That's quite a mouth-full to say it's all about the ever growing chasm between the top 0.01% and the rest of the world.
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