Inflation – The Risk Is Still Here

The trillions of dollars, euro, yens, Yuan etc. created by the central banks since the 2008 crisis haven’t triggered any wave of inflation, contrary to what history has been teaching thus far. But should we underestimate the risk? Of course not. This mass of money created out of thin air by the central banks has not generated higher prices for a very simple reason: instead of being invested in the economy, it has remained idle in the banks. All of this money is “frozen” – the most part at the central banks themselves! Let me explain: central banks print money in order to buy back sovereign and corporate bonds, thus providing governments and corporations tons of liquidity. But very little of that money finds its way into the real economy – demand is weak, stringent solvency requirements keep businesses from borrowing, opportunities do not abound, due to a weak recovery. On the other hand, banks have stopped lending to each other because after the 2008 crisis, they lost...

from GoldBroker.com https://www.goldbroker.com/news/inflation-the-risk-is-still-here-1167