Dear Editor,

Since September 2019, the Federal Reserve has been buying 80% of US Treasury debt. The US is borrowing from itself —unprecedented. The attack on the Abqaiq oil facility in Saudi Arabia in September 2019, which affected global oil supplies significantly, barely increased oil prices.

The killing of the Iran general by the US on January 3, 2020, barely influenced oil prices. The markets are not being influenced by threats to Middle-East oil.

Since the global financial crisis of 2008, central banks globally have been buying their government’s debt, and this exceeds the total global growth. A growing economy has been bought by monetizing debt which was not bought by real buyers. It’s like paying off a credit card with a credit card.

The world economy is not normal. Japan, the European Union, Sweden and Denmark have experimented with negative interest rates, which is unprecedented. According to the World Bank, the world economy will grow by 2.5 %, up from 2.4 % in 2019, the weakest since the global financial crisis in 2008- 2009.

The Central Bank of Belize kept its interest rate at 2% (the lowest in history). A lower interest rate environment improves financing capacity for all. Low interest rates encourage both consumption and investment and offset a drop in imports caused by a depreciating foreign exchange rate.

Why are Belize’s and the global growth rates so low? This defies logic. Something is not right.

Yours truly,
Brian E. Plummer