-IMF Managing Director Christine Lagarde
She refers to the global recovery today as feeble. Strong stuff but what does that mean for investors? There will not be any control on inflation until we get back to 2% or higher, then central banks will start to take a look at what to do in this area. Can you really afford to lose 2% in real value in a low interest rate environment? Real rates are negative. So we have policy officials that think good policy is destroying savings at a higher rate.
When is there going to be policy officials that speak up for the creditor? (Speaking up for creditors is not about imposing austerity on emerging markets like what was tried in the 1990's. That was painful.) I understand that we want to get unemployment down and close the output gap. This is good for everyone. Deflation increases default risk which is extremely harmful for savers, but couldn't we think out of the box instead of the usual inflation employment trade-off?
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