Central banks around the world panic
|Marek Feder|source|264x
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Central banks around the world panic

The situation in the world is far from ideal. Various experts and analysts have been highlighting the threat of the financial crisis since 2015. It seems that coronavirus has brought us into recession, the consequences of which may be devastating to the financial world. This is also understood by central banks, which are beginning to resort to extreme practices.

Unconventional monetary policy methods include, for example, quantitative easing, significantly lowering interest rates or the so-called "helicopter money". We have become used to quantitative easing and lowering interest rates as these were used during the 2008 financial crisis. However, the talks are now focusing on the helicopter money method.

 

However, this method is a big question mark. When applied, citizens receive money directly from the state. In practice, every citizen could, therefore, receive the same amount from the state to avoid freezing the whole economy. The problem, however, is that people will not spend the money on the things the state would like them to. To make matters worse, helicopter money is the same method as printing money - quantitative easing. Moreover, this method has never been used in practice to the extent that it is now being discussed. This represents an additional risk in the current situation. However, governments do not seem to have a choice. For example, the US is now considering this step, with each citizen receiving up to $ 1,000.

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