According to CNN, the world’s largest central banks has pumped over $9 trillion into the global economy. But why have economies still not grown?
This is because there are actually no more big nominal profits to be made anywhere and all that excess money (nominal value) is merely being traded into real value in the form of equity. Since interest rates are merely the nominal profits earned in lending money, then interest rates must go down too, and this is why “The main effects (of printing money).. have been to lower longer-term interest rates and to boost equity prices.”
All that money is being built up into bubbles: equity and debt. When it goes beyond its breaking point (when the gap between real value and nominal value is unsustainable), then the bubble pops:
“With the commerce the same, the excessive amount of paper might soon exceed the total amount of gold and silver needed to circulate in the country, had there been no paper money. The excessive paper money would immediately have returned upon the bank to be exchanged for gold and silver.“
Which Will Be Hardest Hit by the $9 trillion bubble?
The amount of nominal value created by each central bank gives us a rough idea on which countries will be hit hardest by the coming bubble, since it must return to their own economies to be traded for real value after the bubble pops. From this infographic, Japan seems to be the country that will be among worst hit because of its excessive printing.