As organizations like the IMF and the UN warn that this is the worst economic crisis since the Great Depression, the US central bank has once again decided to pump trillions of dollars into the economy.
RT’s Boom Bust talks to the CEO of Transformity Research, Tobin Smith, who has been sounding the alarm lately, saying that the economic downturn in the United States is not due to the coronavirus pandemic.
“Let’s bear in mind that up until eight days ago we were in a free fall and then the Fed put the United States on its back and it really put the world on its back. It basically said that the world is too big to fail,” Smith says.
“There’s been a dramatic difference which is not only the liquidity in the United States, but the IMF, which we fund primarily, opening the spigot to Asian countries, to other parts of the world. And that’s a big deal,” he added.
Smith goes on, noting: “Now, we’ve least not become a solvency problem at this point, we were a coronavirus problem certainly which kicked off this waterfall negative economic effect.” According to him, the “Fed has unlimited ability to make this thing as a bridge loan…”
The CEO explains that there is “enough firepower” in the world to add to the $290 trillion of debt we have right now, and that’s what scares central bankers the most. “So, they’ll continue to monetize this debt and keep the wheels turning until our self-inflicted closures come back…”
For more stories on economy & finance visit RT’s business section
