World Bank President David Malpass believes that “advanced economies” are gobbling up world capital to pay off their national debt.
Malpass said during a recent interview that the world’s resources and money are being concentrated in advanced economies, while developing countries are challenged to manage their own economic crises.
The manager invited us to reflect on this point: “Think about how all the money in the world should be used to pay the national debt, not only of the United States, but also of Japan and Europe, for example,” added Malpass.
After resigning from the position he currently holds, Malpass explained in a LinkedIn post how proud he is of having worked hard to reduce poverty, increase economic growth, reduce the public debt burden and improve the standard of living of all humans.
However, he now admits that he is frustrated by the amount of money currently required to service the debt of major world powers, while the rest of the world continues to face challenges of its own.
“If we look at it from the point of view of a person who lives in a poor country, they will understand that there is not enough capital for everyone, because many of them do not have electricity, water, or food. And that’s a big challenge that I think the world should pay more attention to.”
David Malpass, President of the World Bank.
The executive said that there must be a better distribution of wealth in the world. So to do that, he thinks advanced economies have to manage their monetary policies better.
At the same time, Malpass said developing countries need better opportunities so they have a way to get out of debt and “get back on their feet” if the world experiences a crisis.
Flee when you see money printers coming, analysts warn
The comments of the current president of the World Bank come a few days after the institution warned that, soon, we could be facing “a lost decade” for the global economy, as reported by Market Times.
The World Bank’s chief economist signed off on a report that talks about the combined effects of the overlapping crises that have hit the world recently.
He also mentions the possibility of a prolonged recession stemming from the banking crisis unleashed in the United States.
The document adds that the crisis will bring adverse consequences, both for rich nations and for those that are developing, leaving the world in economic stagnation.
On the other hand, more than 50 chief specialists from around the world said they see a global recession coming or a decrease in economic activity across the entire geography of the planet.
They all refer to the consequences of the decisions taken by the world’s governments during the Covid pandemic.
Those were times when money printers were turned on, a phrase that is often used to refer to the increase in the monetary base of nations.
The United States, for example, had such a high money supply in 2020 that it reached record levels.
Now, the US money supply has risen again as the Federal Reserve used its emergency funds to make some $300 billion in loans to cash-strapped banks.
As happened in 2020, the issuance of inorganic money by governments affects the increase in product prices, even generating episodes of hyperinflation.
This saturation of inorganic money flooding the US economy is often interpreted as an indication that it is time to turn to bitcoin. This, is due to its unique strengths as a haven of value similar to gold.
