A More Effective Response To The Crisis – Monetary Insanity Is Not The Solution To Monetary Excess

Read more on this subject: Economy – Economics USA
News Story Source: https://www.zerohedge.com, by Daniel Lacalle
In the face of an unprecedented crisis, we have to be realistic, responsible and cautious. 

This is a supply shock added to a mandatory shutdown of the economy. As such, a serious response must be supply-side driven. It is ludicrous to try to stimulate demand with printed money and public spending in a forced lockdown where any extra demand will not drive supply up, even may drive it down.

A mandatory shutdown due to a supply shock is not solved with government spending or demand-side measures. Printing money and lowering rates help the already indebted and governments with already historic-low bond yields, deficits are already going to soar due to automatic stabilizers, so governments need to work on three things:

First, make sure that once there is a tested and approved vaccine, the production, distribution, and healthcare networks are going to be adequately prepared to respond to the population requirements.

Second, make sure that businesses don't collapse
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