Gita Gopinath, Ray Dalio, Jay Powell and Mark Carney have written/warned along similar lines.

Gita Gopinath, Ray Dalio, Jay Powell and Mark Carney have written/warned along similar lines.

1. Central bank monetary policy infuse liquidity by buying financial assets and lowering interest rate

2. Central bank's have power to lend but not to spend, cannot stimulate demand

3. Free money being invested not spent (we are in liquidity trap)

4. Those who do not own financial assets are left behind (DJIA hits 30K, S&P500 up 60% since March 2020, despite high unemployment)

5. Responsible fiscal policy is required to transfer cash, to stimulate demand and to lower unemployment without compromising public debt sustainability

6. Low rates and monetary policy has promoted excessive risk taking that has led to heightened financial stability risks

7. Another economic shock will lead to negative real rates, monetary policy will have limited effect

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