Kroll Bond Rating Agency Releases Research Report: “Navigating an Uncertain Global Economy in the Age of Financial Repressi...
September 27 2016 - 10:05AM
Business Wire
Kroll Bond Rating Agency (KBRA) has released macro-market
research entitled “Navigating an Uncertain Global Economy in the
Age of Financial Repression.” The report is based on remarks to be
presented by Christopher Whalen at the events in Dublin and Madrid
over the next week. The report makes the following key points:
- Since the 2008 financial crisis, global
growth has slowed and the overall level of debt has grown.
Individuals in many nations have made an attempt to reduce their
levels of indebtedness, but in aggregate since 2008 nations have
gone on a debt-fueled spending binge encouraged by the fact that
the cost of servicing public sector debt has fallen.
- Global central banks acting alone have
been asked to somehow address the burdens of global over-capacity,
excessive debt, rising unemployment, and slack consumer demand. We
should be grateful to our colleagues at the Fed and other central
banks for trying, but it seems clear that new thinking is needed
when it comes to both monetary and fiscal policy.
- Central to any new approach to monetary
policy must be the realization that the secular decline of interest
rates, which is the centerpiece of financial repression,
necessarily also drives deflation. Without a sustained increase in
the yield on investment assets, KBRA believes that the world faces
a protracted period of low or no growth and the eventual
destruction of public and private financial institutions that
depend upon investment returns.
- Some observers believe that we are
doomed to a future with low growth and tepid inflation. We at KBRA
believe that the future prospects are far brighter, but only if
public leaders find the courage to restructure bad debts and
restore income to the global economy by ending regressive policies
such as negative interest rates and quantitative easing. Prompt,
decisive action will help to restore function to markets and
financial institutions, and renew confidence among a resentful and
uncertain public.
To view the report, please click here.
Follow us on Twitter!@KrollBondRating
About Kroll Bond Rating
Agency
KBRA is registered with the U.S. Securities and Exchange
Commission as a Nationally Recognized Statistical Rating
Organization (NRSRO). In addition, KBRA is recognized by the
National Association of Insurance Commissioners (NAIC) as a Credit
Rating Provider (CRP).
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160927006172/en/
Analytical:Kroll Bond Rating
AgencyChristopher Whalen, 646-731-2366Senior Managing
Directorcwhalen@kbra.com