Staying Afloat in an Economic ‘Perfect Storm’

[claireokc]

In a 2000 movie, “The Perfect Storm,” George Clooney played the captain of a fishing boat caught in a storm at sea. Clooney’s greying hair and confident manner testified to his ability to safely navigate stormy seas; but this time, the boat is in a “perfect storm” caused by the convergence of three weather fronts creating waves so large that the boat sank despite Clooney’s best efforts. We are not yet in an economic perfect storm, but there are signs that the world may be headed in that direction. The storm has been building for years, although no one could have predicted that so many waves would come at one time: a global pandemic that caused massive unemployment and unprecedented supply bottlenecks wreaking havoc on worldwide economic growth and inflation; and a torrent of new money and near zero interest rates engineered by central banks to prevent total economic shutdown, but which also raised the specter of inflation that we thought we had conquered decades ago. Central banks’ easy money policies and low interest rates on bonds fueled bubbles in stocks and other assets as investors chased after higher yields. Finally, we are also facing a return to economic mercantilism that has stifled world trade and investment and is at least partly responsible for enhanced political uncertainty in the world’s largest economies—the United States and China. ...

Source: https://www.theepochtimes.com/staying-a ... 21503.html