Uncharted territories ? I have heard this expression so often starting in 2007 and 2008 when central banks began to be unconventional. And it is true there was no real precedents to what was undertaken and that the territories explored then were largely “terra incognita”.
But I have the feeling that these uncharted territories were just an introduction to the truly uncharted territories we are entering now. The size of the tragedy. The scale of the economic collapse. The gigantism of the packages put together and the speed at which it has been put in place. All of this is a challenge to our mind.
Some say it is a combination of Spanish flu, Great Depression and WWII all at once.
Some other say we are entering our Japanese moment with public debts rising to level just seen there.
Many are questioning the shape and form of the new “new normal” that will follow the crisis.
It is a trillion dollar question that will mobilize quadrillions of brain cells for a long time. Level of debt and deficits ? Low rates for long ? Inflation or not ? Financial models ? Financing of public goods ? Effect of international fragmentation ? Role of states ? The shopping list is endless ...
Whether we like it or not, whether we want to come back fast to pre-crisis normal or not, the after will be different. Will we accept it as is ? Will we model it ? Will we direct it ? Will it be ours !
