1) The WSJ featured an article on how the COVID crisis is accelerating the decline of cash as a method of payment. It is worth clicking on the links embedded in the story. It is closely related to what we discussed last Thursday, and also very much in line with a general theme we will repeatedly see in Global Trends: the COVID crisis is most likely to accelerate trends that were already in motion before its occurrence, rather than to represent a reversal. This is the case for income inequality, social strife, political polarization, the retreat from globalization, the mounting tension with China, the trend toward automation, the generalization of easy money policies, and the decline of cash...
2) Also in the WSJ, Greg Ip opines on the role of easy money in fueling, at once, record stock valuations and mounting government debt. Both worry me greatly - more than they seem to worry other economists. That is especially the case for mounting government deficits and debt, as we will discuss in Module 9. If the massive injections of liquidity that we have witnessed ever lead to inflationary pressures, the FED may have to start raising rates. A huge stock of public debt could make this very expensive for the government. The very demand for loanable funds that emanates from the public sector may in itself put upward pressure on rates, ultimately. Remember - interest rates have nowhere to go but up. I expressed these concerns last August. My concerns have not eased since, though the scenario I described could be quite removed from us in time.
UPDATE: People from both sides of the political spectrum seem to be voicing the same concerns as I have on the possible inflationary effects of current US macroeconomic policies: Michael Bordo and Mickey Levy do so over on the Wall Street Journal opinion page, while Larry Summers expresses similar worries in the pages of the Washington Post.