Saxo UK CEO Charles White Thomson has hit out at central banks’ recent management of the money supply.
White Thomson said he drew ‘inspiration’ from the Miley Cyrus song in formulating his viewpoint.
In a note, the CEO said he has been reflecting on ‘the highly damaging era’ of rock bottom interest rates and quantitative easing (QE).
“The purveyors of ‘nanny finance’ and free or super cheap money unleashed a financial time bomb into main street whose damaging shock waves will be felt for many years to come,” he said.
“The consequences of the noble but misguided desire to play financial superhero and save, protect, bail out all with industrial scale liquidity, include rampant inflation, asset bubbles, excess speculation, a generation of individuals and companies with a skewed attitude to risk or the value of money and a cost-of-living crisis as previously seen cheap debt becomes expensive. The counter argument would have prevented a deep and debilitating global recession.”
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White Thomson added that his preference is for a less reactive world where central bankers have a ‘lighter touch’. The monetary pendulum should have a ‘gentler swing’ with subtler raising of rates, in tune with the ‘natural ebbs and flows’ of the economy.
In terms of where to go from here, White Thomson said now is a good time to review the monetary policy of the UK with a focus on lessons learned, so that errors are not repeated.
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“It is the right time to acknowledge the wins and the hard decisions that were made in a very difficult period,” he said. “This will require open minds and careful consideration including an active involvement of generalists to challenge the status quo and established group think.”
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