“We’ve seen this movie over and over again”– imprudent monetary policies encourage reckless behavior and a misallocation of capital resources so that risk seeking buyers and savings in our society become collateral damage of the quest to ‘rescue’ bankers at all costs. I disagree that the ECB was right to roll out more insane terms yesterday, but the rest of El-Erian’s comments in this discussion are lucid.
Mohamed El-Erian, chief economic adviser at Allianz and Bloomberg View columnist, discusses the currency impact of policy changes by the European Central Bank and why governments must move beyond monetary policy. Here is a direct video link.
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