Collins asked, "What does a gradual recovery of the world economy mean for inflation? Should we be worried about upcoming inflationary pressures in the western world?"
Zurbrügg answered, "The answer in our view is: not yet.
"While we’re always vigilant with regard to the threat of inflation, we aren’t rushing to join the vast majority of investors and pundits who think that all this money printing must result in strong inflationary pressure or even hyperinflation.
"We regard that as a somewhat oversimplified view, since monetization of debt does not automatically result in inflation. This is especially the case when the lending activity of banks is still low and only slowly increasing."
There is the problem. Where is the recovery? Lending activity is a good measure of capital formation activity. Actual capital can be formed with stock purchase by outsiders (Investors) and by self-investment by companies, via borrowing. If this is genuine recovery, where are the mergers?
Although worldwide stock markets have recovered somewhat, there is no attendant self-capitalization. The recovery is lopsided apparition.
More to fear is the world's dominant economy, the US, is clearly heading into government controlled socialism. Watermelon (green on the outside, red in the center) economics is a a mental image of a centrally managed economy. Central management is full of problems. The principle problem being up to date accuracy of information. A poorly understood, local decision, based on immediate data, is more agile and therefore superior to the best quality remote control management. Economies move too quickly.
Politicians and their supporters who treat an economy as a stagnant beast are stupid victims and predatory politicians.
We're going to muddle out of this politically precipitated economic malaise somehow. If only the predatory opportunists and other political vermin would shut up and resign from office, we could start early... But that won't happen. We have at least 3 more dreary years.