Will you still love me when I’m 64?

Mcculley
Parikh
Paul McCulley and Saumil Parikh make the case for the Fed’s transparency, arguing that both the US and the world economies have benefited as a consequence of this openness. Although I intuitively agree with them, I don’t think their low interest rate charts help to prove their point, viewed against the backdrop of the Chinese exported deflation of the last 20 years or so…

I think the article’s utter importance rests elsewhere: according to recent Fed estimates, based on population growth, participation and productivity growth, aging will trim 1 % from potential US GDP growth during the following 10 years… Since populations from Europe, Japan and China are also rapidly heading in the same direction, this contraction could easily be extrapolated to world growth forecasts.

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