Taps Coogan – November 23rd, 2020

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Daniel Lacalle, Chief Economist at Tressis Gestión and author of several books including ‘Freedom or Equality,’ recently spoke with MacroVoices‘ Erik Townsend in a wide ranging discussion about his outlook for the US and Eurozone economies.

Mr. Lacalle warns that despite the popular perception that there are no practical limits on how much quantitative easing the Fed can execute, the real limit arises from the currency markets. If the Fed ‘prints’ too much money and the dollar starts to lose value against the Euro or other major currencies, given that yeilds are next to zero, he believes investors may start dumping US dollar denominated assets, complicating the cost-benefit of ever more QE.

He also warns that endless monetary accommodation in the Eurozone has discouraged badly needed pro-growth economic reforms on the continent, something which the US risks backsliding into with the return to a protracted period of highly accomodative monetary policy.

Enjoy the full discussion above.

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