Advertisement
Opinion
How the US Federal Reserve is financing climate change by taking its cue from modern monetary theory
- A central bank policy that floods the economy with money and fuels consumption also exacerbates climate change, the greatest threat to humanity’s existence
3-MIN READ3-MIN
Andrew Sheng is a former central banker and financial regulator, currently distinguished fellow at the Asia Global Institute, University of Hong Kong.
Visiting Washington, London and Beijing over the past fortnight has left me confused. In Washington, the mood is “my way or the highway”, in London, “if Brexit, a May exit” and in Beijing, the “Belt and Road Initiative”.
Recent events demonstrate that going forward, anything is possible.
The submission of the long-awaited, but as yet unpublished, report by US Special Counsel Robert Mueller on possible collusion between the Trump campaign and Russia is seen as a simultaneous victory for both Republicans (no collusion) and Democrats (obstruction of justice).
Advertisement
All eyes are on the 2020 presidential election, with the political spectrum spanning a right-wing white supremacist fringe to extreme left-wing socialism. The buzz word in Washington is “modern monetary theory”, which suggests that central banks can print as much money as necessary to fund fiscal deficits without inflation.
Advertisement
The US Federal Reserve has been following a variant of modern monetary theory, since it has already signalled that no more rate cuts are necessary this year in the face of a slowing US economy.
Advertisement
Select Voice
Select Speed
1.00x