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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
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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The submission of the long-awaited, but as yet unpublished, report by US Special Counsel Robert Mueller on possible collusion between the Trump campaign and Russia is seen as a simultaneous victory for both Republicans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).
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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.
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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.
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