Glenn Stevens Last RBA Meeting Leaves Australia with Rising Debt

Glenn Stevens has faced the dilemma confronting central bankers across the developed world: that low interest rates put in place to deal with low inflation, the threat of deflation, or tepid economic growth, run the risk of causing dangerous asset price bubbles that threaten financial stability.

He’s well aware of the risks; Stevens has publicly questioned the extreme low interest rate policies being pursued by central banks overseas because of their impact on retirement savings.

He has also argued repeatedly that monetary policy has been left to shoulder too much of the burden of stimulating the economy, calling for fiscal policy to take a greater role through government investment in long run assets that can benefit the economy.

Glenn Stevens is no Alan Greenspan: the former US Federal Reserve chairman, hailed as a “maestro” in office then exposed as a bubble man, whose low interest rate policies and failure to perceive the risks being run up by banks led to the US housing market catastrophe.

But if the private debt bubble bursts and it all ends badly, it will similarly taint Mr Stevens’ legacy.

via ABC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza