Inflation Is Cooling, Leaving America Asking: What Comes Next?

[Zinneke]

Inflation at 4-8% at medium term while maintaining employment levels high may actually be preferable to a sudden Volcker shock that sends the Western economies into a deep recession. The Fed and especially the ECB are caught in between two chairs though, they don't know if they should keep interest rates down and see an inflation spiral leading to guys with little mustaches pop up or raise them and cause a recession, potentially seeing guys with little mustaches pop up.

In the long term the banking sector has to be reformed. Right now the banks have too little incentive to allocate credit in an efficient way. The vipers on the hotdesks only care about short term deals to get their end of quarter/year bonus, not about the risks in the long run. I'd make every end year bonus 100% tax and put that in a money pot for the next bailout the bank has to endure. Right now its just people playing casino on cheap credit, and the reason the tech sector is feeling the brunt is because they themselves are the drivers of venture capitalism at its worst i.e. you can create new products and code out of thin air with no inventory, costs, risk anything but no intrinsic value either. A fantastic way to speculate.

Every banking employee that is bailed out by the government should be put on a minimum wage salary.