Escape from the Central Bank Trap: How to Escape From the $20 Trillion Monetary Expansion Unharmed, Second Edition

“Lacalle is one of the leading next generation economists who can simplify the complex. His teachings come from a market practitioner’s perspective. This book is about the economic truth.” —Keith R. McCullough, Chief Executive Officer, Hedgeye Risk Management

“A penetrating framework for understanding the co-dependencies among monetary policy, the economy and the financial markets. Lacalle provides us with a road map that anyone who cares about long term economic health can grab hold of.” —Michael Purves, Chief Global Strategist, WEEDEN & CO

Escape from the Central Bank Trap is about realistic solutions for the threat of zero interest rates and excessive liquidity.

The financial crisis was much more than the result of an excess of risk. It is essential to understand that the same policies that created each subsequent bust are the same ones that have been implemented in the past years, through Quantitative Easing (QE) to allegedly “solve” this crisis.

In this book, the author explains how, through lower interest rates and the artificial creation of money, central banks have created a massive liquidity trap, perpetuating bubbles, incentivizing high debt, and increasing financial risk.

The objective of this book is to present solutions in fiscal and monetary policy that can be implemented today, while at the same time debunking magical solutions offered by some authors, particularly the so-called Modern Monetary Theory. The author also explores the impact of monetary expansion on commodities and Emerging Markets, Trump’s economic policies, Japan’s fight against stagnation, Russia’s central bank unique strategy, and the European Union model.

Escape from the Central Bank Trap is about realistic solutions for the threat of zero interest rates and excessive liquidity. Overcapacity, high debt and perverse incentives to assault taxpayers and consumers are not ingredients of welfare, but of secular stagnation.

The United States needs to take the first step, defending sound money and a balanced budget, recovering the middle-class by focusing on increasing disposable income, and supporting productivity growth. The rest of the OECD will follow. Because supply-side policies work.

Our future does not need to be low growth and high debt. We cannot expect humanity to progress if we enslave future generations with unsustainable debt levels just to perpetuate the imbalances of an inefficient economic model.

Cheap money becomes very expensive in the long run. There is an escape from the Central Bank Trap.

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