Annual Jackson hall symposium, will present itself this week, when central bankers and economist from all around the world will address the current global slowdown. The Jackson hall symposium, is a well-known event for investors, to seek forward guidance on global monetary policy.
As per last financial crisis in 2008, former central banker of the Federal Reserve Bank, Ben Bernanke used the Jackson Hall symposium for his horrendous remarks and idea’s on how to tackle the 2008 financial crisis. Back then, central banks had various amounts of tools to combat the financial crisis, from lower interest rates and QE.
Ten years on and the central banks, over the years used all the fire power to address the 2008 crisis. For the last 10 years governors and bankers, flooded the market with cheap credit and negative interest rates to help boost global growth, to no avail. It was a dismal attempt and these central bankers was warned of the side effects of these experiments.
Fast-forward today and global growth is in one hell of a crisis and developing countries are worse off. Countries, like Argentina, South Africa, Turkey and more economies are battling with high inflation, high debt levels and staggering unemployment levels. Moreover political instability and absurd government interventions are becoming the norm in the developing world, which literally decreased the prospects of a sharp recovery.
The 2008 global recession was a monetary policy experiment that was never seen before, to the contrary with, zero growth. More of the same experiment, will yield to the same outcome and I’m very sure the market will not buy into this madness again.
Central bankers in the developing-world’s, tools are done and there’s absolutely no fire power left, they used everything on a death beat global economy. Only option now for bankers and governments is to write off debt and wait for the market to reset itself. It should’ve been done in 2008, but central bankers at the time had other ideas outside of the economy textbook. Well the side effect of writing off debt, is that people’s savings will vanish, because all debt are attach to savings.
The end game will be unimaginable, but one thing is for sure, the less dollars are into the system will mean a stronger dollar.