Quantitative Easing & GFLR

            Present time central bank of US & UK going to buy government financial assests ie. Matured bond held by financial  ( pension fund, insurance fund) & banking institutions. Present time due to covid-19 lock down cycle of money is halted so central bank will print new note or issue digital currency to by government new bonds or government liability bonds which are on maturity. 

            This time economies are suffering from recession, tax collection of governments are decreased so meet the financial requirements for current liability and expenditure central bank is pumping fresh money in the economy so rise of interest rate will stopped and cheap money will be available at market. Thus industrial output would be maintained and unemployment in public will stopped. 

        This method is good but ultimately we are pushing economy by monetary credit but in future if inflation rate hike then what is solutions ?

      Second this quantitative easing effect on share market rise where 40% shares are hold by 5% wealthy people. Thus wealth of rich people will increase. Ultimately quantitative easing benefits for marginal people are very rare.

      Present time government should use method of GFLR. Goverment should amend the bank law to take deposit of gold & other precious metals of households and lend this after GRR & SGR on GF lending rate and can issue digital currency.  This method will make economy more strong by contribution of people and participation of banking & financial institutions. If only 10% households gold come in banks this will be a big booster.  I have already mentioned in my previous posts about GFLR in details. GFLR will increase power of banking and finance system which is ultimately healthful for economy. This will reduce interest rate for long time and increase industrial productivity. This method provide two direct benefits first regular income to households and new employment opportunities to labours. GFLR will reduce dependence on foreign currencies help for investment. GFLR will save interest cost of foreign debt. GFLR increasing products output will rise in exports this will narrow the trade gap of the country. GFLR generate new employments in service sector alongwith manufacturing sector. This impact will clearly seen on primary sector and transfer money to marginal people. GFLR provide more space for public financing so government can establish new institutions and public enterprises for new technology research and development. 

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