In the past few months, we witnessed a series of defining moments in our political history, with Britain’s vote to Brexit, (several) terror attacks in France and Germany, up to the recent attempted military coup in Europe’s backyard, Turkey. Ultimately, observers are uncertain about Europe’s political stability and the future of the EU.
These worries are very valid, as geopolitics is a primary force that can shake the markets. Therefore, the high-risk environment that we live in, underlines the importance of making prudent decisions in your investments to protect your wealth.
Markets have greeted the rumors of helicopter money with intense enthusiasm, since Ben Bernanke’s visit to Japan. It is yet another symptom of our economy’s addiction to loose monetary policies and “something for nothing” fiscal remedies. Helicopter money, the next evolutionary stage of QE, is the manifestation of the failing, yet persistent, monetary policies adopted and enforced by our Central Bankers. This time, their proposed solution for an economy that just flatly refuses to get back on a growth track, despite the long series of aggressive interventions, is a direct and permanent injection of newly printed money into the economy, by circumventing completely the banking system. The idea is that this measure will succeed, where QE failed: This time, the consumer will be directly reached, and the funds will not remain trapped within banks and institutions. Therefore, their thinking goes, the money will be spent, demand will be inevitably stimulated, boosting the overall economic health of the whole country and reaching the Central Banks’ price inflation targets. Even if such an irresponsible and desperate move does make a difference in the short term, its long-term consequences have the potential to be deeply detrimental: Such an action, by default and by design, cannot be reversed, and it can only further corrode the already unsound money base of our economy.
Will voters’ dissatisfaction with their governments reshape the political map?
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