Central Banks Have Broken Capitalism

It has been a decade since the Federal Reserve and other central banks began cutting interest rates to zero — or even below — and injecting unprecedented amounts of cash into the global financial system via quantitative easing. And while global stocks are at or near record highs, central banks around the world are increasingly abandoning their hopes of normalizing policy with economic growth slowing. On top of that, public and private debt levels are higher than ever.

Some central banks are prepared to take drastic measures. In February, the staff at the International Monetary Fund published a guide to make even more negative interest rates work. Meanwhile, proponents of “modern monetary theory” argue that governments should generate money and distribute it across the economy, until it reaches full employment.