The governor of the Australian Reserve Bank (RBA for its acronym in English), Philip Lowehas given the concept of money printing a twist as New fiscal stimulus measures are being applied in the country in the middle of the ongoing pandemic.
In a speech delivered in Sydney on Tuesday, the head of the central bank said this The government could take out loans “under very favorable conditions”. and the Government debt was currently much lower than in many other countries. The calls to print money are wrong, he said:
“There is no free lunch. The bill always has to be paid and paid in one way or another with taxes and government revenue […] The message here is that someone always pays. “
Dr. Lowe, RBA chairman since September 2016, said after the announcement of the expansion of immediate social security measures that will cost an additional AUD 20 billion Reportedly ($ 14.2 billion).
Lowe says printing money is not the solution
Lowe is reluctant to follow the Fed’s strategy of rampant money printingand remains firmly convinced that monetary policy financing of fiscal policy is only appropriate if the government cannot influence the amount of money created by the central bank and the government’s debts are very high.
However, The bank is not entirely against modern money theory, as around $ 50 billion in government and federal government bonds have been repurchased in the past three months has cut interest rates to a record low of 0.25%. Lowe rejected negative interest rates in his speech on Tuesday.
Bitcoin remains a safe haven
Tax stimulus packages that print more money are good news for Bitcoin holders Strengthening the existing discourse on financial refuge due to its limited wealth. The digital asset manager, Charles Edwards, commented this week the The US stock market reached new highs while the country was still in a recession:
“This is the power of exponential money printing. Your dollars in 2020 are worth 28% less than in 2019.”
He said that overvalued stocks stand in contrast to undervalued Bitcoin, and added that in his opinion It’s only a matter of time before money floods the cryptocurrency.
The European heads of state and government conclude an economic contract for $ 2 trillion
On the other hand, The heads of state and government of the EU agreed on a rehabilitation fund in the amount of EUR 750 billion ($ 865,000 million) lent in the financial markets. almost the half It is distributed in the form of grants to the most affected EU countries.
The European Commission has also agreed a new EU budget of almost 1.1 trillion euros (1.27 trillion US dollars) for the period 2021 to 2027. This creates a combined purchasing power of around $ 2 trillion.