With the world gripped in a deep deflationary trap and seemingly no clear way out, former UK Financial Services Authority chief Lord Turner is advocating a policy of debt monetization, with central banks financing major fiscal deficits. As chair of the major policy committee of the Financial Stability Board he was closely involved in re-regulating the global economy and believes the banking system is now much safer and won’t face another crisis along the lines of 2008. What he is concerned about, however, as he explained in an interview with Real Vision TV this week, is the level of public and private debt in the global economy, which is higher than ever and continually growing. Speaking to Real Vision, Lord Turner said with interest rates close to zero, or negative in some countries, it just creates more incentive for people to create more debt.
We are in a deeply profound deflationary trap
