Home > Global Finance, Indian Economy, Politics, Uncategorized > Nouriel Roubini suggests ‘more of the same’ medicine to cure global stag-deflation

Nouriel Roubini suggests ‘more of the same’ medicine to cure global stag-deflation


With traditional monetary policy becoming less effective, non-traditional policy tools aimed at generating greater liquidity and credit (via quantitative easing and direct central bank purchases of private illiquid assets) will become necessary. And, while traditional fiscal policy (government spending and tax cuts) will be pursued aggressively, non-traditional fiscal policy (expenditures to bail out financial institutions, lenders, and borrowers) will also become increasingly important.

In the process, the role of states and governments in economic activity will be vastly expanded. Traditionally, central banks have been the lenders of last resort, but now they are becoming the lenders of first and only resort. As banks curtail lending to each other, to other financial institutions, and to the corporate sector, central banks are becoming the only lenders around. (via Nouriel Roubini: Has Global Stag-Deflation Arrived?).

The Prophet Who Foretold Doom

Is now handing out free advice. His pearls of wisdom? Government and public institutions should do more of the same. More printing of money, a more active Federal Reserve, more loans, more government intervention.

Did I tell anyone recently that Sanskrit, the mother language of most languages in the world, has no word for free? Words like मुफ्त are toxic imports and a fit case for anti-dumping.

‘Free’ advice is an oxymoron.

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