It's been seven years since the financial crisis blew up. Investors are hoping against hope that 'normalisation' is around the corner. Some even still expect the Federal Reserve to raise interest rates this year. Yet, behind the scenes, central bankers are becoming ever more radical.
Last week, Bank of England chief economist Andy Haldane gave a speech in Northern Ireland, in which he suggested a move to abolish cash. Surprised? Shocked? Haldane's worried that we're never getting back to 'normal' again. Interest rates are unlikely to be back up to pre-2008 levels by the time the next recession hits. So central banks will have little or no room to cut rates when the next downturn comes. That's a problem.
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