One of the biggest stories in the global economy is the lack of inflation in the developed markets.
With central banks around the world aggressively stimulating with easy monetary policy, many experts are struggling to understand why we haven’t seen money move in a way that would stoke some inflation.
In fact, the economy remains quite sluggish, which has others worried we could actually be heading for deflation.
Art Cashin, the veteran NYSE trader from UBS Financial Services, has long been skeptical of the aggressive actions taken by the Federal Reserve and its peers.
In a new interview with King World News, Cashin warns that financial market conditions remain very risky. From the interview:
What I am saying is: They thought they were going to solve a desperate problem by desperate measures. I don’t believe it’s having the effect they wanted, and it’s building up a very, very dangerous situation. If that money were suddenly to get velocity, inflation could break out.
Conversely, by pushing on a string and not getting anything done, they may wind up being in a spot where, if the economy moves to stall-speed, we’ll get deflationary pressure. Yes, they’ve begun treating the patient with very, very drastic remedies, and my concern is: Is it ultimately damaging the body in a way that will bring back some of the horrors they tried to avoid?