John Plender might be right in ruling out the Japanification for America and the EU /Ft, 23/24 May 2020/. Indeed, due to a couple of reasons – to combat the effects of the Covid-19 pandemic, to save the social structures in America and Europe, to maintain the fragile balance between the Northern and Southern members of the Eurozone governments and central banks will use fiscal and monetary pumps heavily.
It will result in higher inflation rates and much higher public debts. Finally, central banks will be forced to raise interest rates and governments will return to austerity policies.
It will be unbearable politically, so the next step might be a one-tier banking system, the abolition of former public debts and a brand-new financial system based on digital central bank money, gold and electricity.
It might mean a new Bretton Woods Agreement or/and a new Plaza Agreement. It might work without huge public debts and risks of runaway inflation.
The same future for Japan, the US and Europe as well?
Governor Matolcsy, MNB, the Central Bank of Hungary