Deutsche Bank warns of global ‘time bomb’ coming due to rising inflation
The rate of inflation, as it can be seen that there won't be a problem, but most likely it's going to continue, and this will lead to, over the next few years, " Deutsche Bank economists have warned.
In its forecast, which will significantly go beyond the consensus of the policy, and Wall Street, " the German Free is a scary thing it is to be a warning to pay attention to, in order to stimulate the economy, and then to ignore the inflation rate, the fear, if it is a bug, if not in the short term, in 2023, and beyond.
The analysis and, in particular, suggests that the u.s. Federal Reserve and its structure will have to tolerate a higher inflation rate, in the name of a full recovery. The company claims that the Fed has no intention to tighten policy until the inflation rate shows a steady increase, which will have serious consequences. "As a result of the delay will be more than the interruption of economic and financial activities, more than it would otherwise be, while SLEEPING, finally, to become operational," Deutsche Bank's chief economist, David Volkert-Landau, and others, wrote it down. "And that, in turn, could lead to a major recession, triggering a global financial crisis, notably in emerging markets."
As part of this strategy, the rate of inflation, the Fed will not raise interest rates or a slowing down of its asset purchase program until then, refer to the "major progress" in meeting their objectives. Several central bank officials have said they are close to it, it serves a purpose.
At the same time, these indicators, such as the consumer price index and the personal consumption expenditure is significantly higher than the Fed's 2% target for inflation. Policy makers say that the rise in inflation is temporary and that it will help with the import of downtime and great results from the first month of the coronavirus pandemic, the crisis on the site.
German team did not agree with the aggressive stimulus measures and the fundamental economic changes that would lead to inflation, which the Fed would not be ill-prepared for it.
"It may be time for the year of 2023 at the latest, however, the rate of inflation is going to be shown again. And while that is admirable, this is
patience is the virtue of the fact that the priorities of which is known as the shift toward social goals, and to ignore inflation, creating a global economy, we are sitting on a ticking time bomb, " said the Volkerts-Landau. "The results can be devastating, particularly for the most vulnerable in our society."
Most of the street: looking to tame inflation
Of course, the German's position, is very common among economists.
The majority of Wall Street agrees with the Fed's view that the inflation pressure is not an issue, and they are confident that there will be no change of policy in the near future.
Ian Hatzius, the chief economist at Goldman Sachs, said that there were "good reasons" to support this position. One of them is, that he is leading, that is, the probability that at the end of the high level of unemployment benefits is going to bring the workers back to their jobs, to relieve the pressure on the wages and salaries over the next couple of months.
For the downward pressure on prices, in general, what's Hatzius said, is that in the majority of today's explosion is on the grounds that it is "the invaluable role that is thrown away", which is going to decline, it's going to be a normal level.
"All of this is to suggest that Fed officials might be his or her own agenda and is not only very gradually, out of the light, the light of the current stance of monetary policy," Hatzius wrote.
According to the German View, that would be a mistake.
In its forecast, which will significantly go beyond the consensus of the policy, and Wall Street, " the German Free is a scary thing it is to be a warning to pay attention to, in order to stimulate the economy, and then to ignore the inflation rate, the fear, if it is a bug, if not in the short term, in 2023, and beyond.
The analysis and, in particular, suggests that the u.s. Federal Reserve and its structure will have to tolerate a higher inflation rate, in the name of a full recovery. The company claims that the Fed has no intention to tighten policy until the inflation rate shows a steady increase, which will have serious consequences. "As a result of the delay will be more than the interruption of economic and financial activities, more than it would otherwise be, while SLEEPING, finally, to become operational," Deutsche Bank's chief economist, David Volkert-Landau, and others, wrote it down. "And that, in turn, could lead to a major recession, triggering a global financial crisis, notably in emerging markets."
As part of this strategy, the rate of inflation, the Fed will not raise interest rates or a slowing down of its asset purchase program until then, refer to the "major progress" in meeting their objectives. Several central bank officials have said they are close to it, it serves a purpose.
At the same time, these indicators, such as the consumer price index and the personal consumption expenditure is significantly higher than the Fed's 2% target for inflation. Policy makers say that the rise in inflation is temporary and that it will help with the import of downtime and great results from the first month of the coronavirus pandemic, the crisis on the site.
German team did not agree with the aggressive stimulus measures and the fundamental economic changes that would lead to inflation, which the Fed would not be ill-prepared for it.
"It may be time for the year of 2023 at the latest, however, the rate of inflation is going to be shown again. And while that is admirable, this is
patience is the virtue of the fact that the priorities of which is known as the shift toward social goals, and to ignore inflation, creating a global economy, we are sitting on a ticking time bomb, " said the Volkerts-Landau. "The results can be devastating, particularly for the most vulnerable in our society."
Most of the street: looking to tame inflation
Of course, the German's position, is very common among economists.
The majority of Wall Street agrees with the Fed's view that the inflation pressure is not an issue, and they are confident that there will be no change of policy in the near future.
Ian Hatzius, the chief economist at Goldman Sachs, said that there were "good reasons" to support this position. One of them is, that he is leading, that is, the probability that at the end of the high level of unemployment benefits is going to bring the workers back to their jobs, to relieve the pressure on the wages and salaries over the next couple of months.
For the downward pressure on prices, in general, what's Hatzius said, is that in the majority of today's explosion is on the grounds that it is "the invaluable role that is thrown away", which is going to decline, it's going to be a normal level.
"All of this is to suggest that Fed officials might be his or her own agenda and is not only very gradually, out of the light, the light of the current stance of monetary policy," Hatzius wrote.
According to the German View, that would be a mistake.
Congress has already approved more than $ 5 trillion pandemic stimulus, and the FED has nearly doubled its balance sheet every month to buy the assets already in the $ 8 trillion u.s. dollars. This is the stimulation continues, the economy is expected to grow at around 10 per cent in the second quarter, and a photo of the appointment is added to the average of 478,000 jobs per month in 2021.
"We've never seen such a co-ordination of the expansionary fiscal and monetary policy before that. This is going to continue, at least in the volume of production is higher than the potential of the " Volkers-Landau said. - Why is the rate of inflation is different this time around."
German team, said that the current rate of inflation can be reminiscent of the experience of the 1970s, a decade during which the rate of inflation was, on average, about 7%, and for a variety of occasions, it reached double-digit levels. Rising food and energy prices, coupled with the end of price controls will help to increase the rate of inflation will rise in this period of time.
The former president, who CALLED the Six-Volcker led the effort to curb the rate of inflation, however, he was obliged to make use of the sharp rise in interest rates, which törətmişsə, and the economic downturn. The German team, out of fear that such a scenario is likely to happen again in the future.
"Already, many of the sources of the rise in prices, which had in the united states. Even if they're passing on the piece of paper, which they are, as people's expectations are the same as in the 1970s," they said. "The risk is that, even if they are only applied to a couple of months, it will be difficult to enforce, especially in such a high incentive levels."
The company said that higher interest rates would cause chaos in the world is charged with the type-ins, as well as an economic crisis, which is likely to be, particularly in a developing economy, where the growth rate is unlikely to be overcome in a high financial cost.
"We've never seen such a co-ordination of the expansionary fiscal and monetary policy before that. This is going to continue, at least in the volume of production is higher than the potential of the " Volkers-Landau said. - Why is the rate of inflation is different this time around."
German team, said that the current rate of inflation can be reminiscent of the experience of the 1970s, a decade during which the rate of inflation was, on average, about 7%, and for a variety of occasions, it reached double-digit levels. Rising food and energy prices, coupled with the end of price controls will help to increase the rate of inflation will rise in this period of time.
The former president, who CALLED the Six-Volcker led the effort to curb the rate of inflation, however, he was obliged to make use of the sharp rise in interest rates, which törətmişsə, and the economic downturn. The German team, out of fear that such a scenario is likely to happen again in the future.
"Already, many of the sources of the rise in prices, which had in the united states. Even if they're passing on the piece of paper, which they are, as people's expectations are the same as in the 1970s," they said. "The risk is that, even if they are only applied to a couple of months, it will be difficult to enforce, especially in such a high incentive levels."
The company said that higher interest rates would cause chaos in the world is charged with the type-ins, as well as an economic crisis, which is likely to be, particularly in a developing economy, where the growth rate is unlikely to be overcome in a high financial cost.
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