Thursday, October 20, 2016

Printing Money Out Of Thin Air
Does Not Create Wealth
"Today in certain countries bankers are not making the highest average salaries any longer , they have been replaced with government servants. Overall I would say it is bad, but that was predictable. The system and the assumptions the whole sector is operating under are just not sustainable, and printing money out of thin air does not create wealth; on the contrary, it is destroying capital. All state interventions have backfired and current monetary policy with low / negative interest rates is putting insupportable pressure on the banks. Bad actors have been allowed to get away with reckless and catastrophic positions for too long. The history of bailouts has sent the message that such actions don’t really have consequences, and therefore my understanding is that moral hazard and risk linked to it have increased .. QE and low rates are the economic equivalent of an artificial coma; they didn’t fix any of the problems of the financial crisis, they simply postponed the inevitable hoping for a miracle.
- Claudio Grass, managing director of Global Gold in Switzerland
link here to the interview transcript

1 comment:

Anonymous said...

1979 US team Volcker, Tony Solomon, Henry Wallich, Bill Miller asked Zijlatra & Leutwiler to form pool