There’s a lot to dispute in this article imo.
slowing price increases are the real threat long term threat to the global economy? Not even deflation, but inflation coming down? That’s ridiculous.
The only roundabout way I can see that being true is if inflation is too low that we can’t accomplish the financial repression needed to correct our current debt/gdp levels and we have a debt crisis. Is that what he’s referencing?
Also I’d like some clarification here.
“Aging populations in advanced economies create political pressure to support the value of assets like homes and financial securities, which leads to policies that hold down wages.”
I wish they’d expand on the cause and effect here. Does the author mean that aging populations that depend on retirement incomes are the reason financial asset values are propped up?
They kind of have it backwards. Asset values are propped up by zero percent interest rates and balance sheet expansion by the Fed. This is pretty clear. Also, retirees wouldn’t need to move into higher risk assets and pump their prices if treasuries paid decent interest rates.
And for the next part, how do zero percent interest rates, or other similar policies that boost asset prices (are there others?), hold down wages? I don’t get the connection there.