Commentary
After more than $20 trillion in stimulus plans since 2020, the economy is going into stagnation with elevated inflation.
Global governments announced more than $12 trillion in stimulus measures in 2020 alone and central banks bloated their balance sheets by $8 trillion. The result was disappointing and with long-lasting negative effects: a weak recovery, record debt, and elevated inflation.
Of course, governments all over the world blamed the Ukraine invasion on the nonexistent multiplier effect of the stimulus plans, but the excuse made no sense. Commodity prices rose from February to June 2022 and have corrected since. Even considering the negative effect of rising commodity prices in developed economies, we must acknowledge that those are positives for emerging economies and, even with that boost, the disappointing recovery led to constant downgrades of estimates….