Indeed, before this monetary relaxation in the EU, there was already ample credit flowing to people and businesses for their investments. Worries are high that the new money will be lent to investment schemes that are too risky or have very limited chance of success. Indeed, we have seen certain initiatives – Big data, Internet of Things (IoT), Artificial Intelligence (AI), digital disintermediation – blow out of all proportion in recent years.
This is happening in all economic sectors – in the finance sector the initiatives in the field of Fintechs are exploding. In more visible areas, electric steps or bikes, for example, a consolidation is starting, just like in the food and other delivery services.
There are too many of them now, creating overcapacity. On top of that, regulators are rightfully applying ‘level playing field’ rules to the newcomers and are no longer penalizing the former classical providers. Your Airbnb apartment should follow the same hygiene, fire protection, labour laws and tax rules as a hotel room in the same country or city.
Also, too many new-tech inventions are only new in form – they do not add any particular value, sometimes to the contrary. Given that cryptocurrencies have been around for some time now, one would like to see a study on why and how they would have an added value over real currencies, not in theory but in practice. In that light, although one should always be positively curious, it has to be seen what real added value the Libra currency of Facebook and its partners will bring to the world.
Overconsumption is another cloud over our heads. It is not sustainable that we leave the freedom of eating and drinking oneself to obesity to the individual, only to charge the cost of treating the treatment to society. That cannot last. The pension bubble is a further issue looming large. People continue to live longer, but have the same or even fewer working years during which they contribute to their future pension. Countries are fortunately increasing their retirement age, although that is not always easy in some countries, particularly in continental Europe. Still, students are studying longer before they enter the workforce.
Health insurance is another similar bubble. Expenditure is increasing, but funding does not follow. All in all, it is time to no longer be selectively blind. The Central Banks have done about all they can to help the world economy. Action is needed on other fronts by governments and, because that will affect voters’ sentiment, it will take real leaders to act. We may be seeing the odd one appearing already, but many more are needed to steer the world economy away from the stormy waters ahead.