This week, most developed markets either hit record highs, or at least their highs for the year. Looking back, it's hard to believe that 2016 saw one of the nastiest starts on record just two months ago, headlines shrieked that global stocks had entered a "bear" market (having fallen by 20%). But while markets have recovered their poise, investors haven't. All the talk remains of central banking, radical monetary policy, and how quickly we can implement it.
A report from Deutsche Bank last week argued that obstacles to full-blown "helicopter money" where central banks print money to fund government or consumer spending directly are largely political, that money printing "has strong historical precedent" (Japan's early escape from the Great Depression in the 1930s being the main example) and that we should actively harness "the infinite power of central-bank balance sheets". The San Francisco Federal Reserve Bank recently argued that the US central bank under Janet Yellen could achieve healthy US growth more rapidly by allowing "inflation to rise temporarily above" its 2% target rate.
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