The global financial markets are not merely relaxed about the world's problems as they stand. They are positively becalmed. The global index of market volatility, the so-called Vix Index or "fear gauge" as some people call it, is registering a seven-year low. As low in fact as it was just before the financial meltdown of 2008. The renowned monetary expert, Professor John Taylor, a former United States undersecretary of the treasury, says that this lack of worry is now itself a worry.
There is just too much money in the financial markets. Is that what's happened? It's got nowhere else to go.
I think that's the best way to think about it. But again, to me, it's time to get back to kind of a normal monetary policy. You know we had, in the UK, in the US, had a very good monetary policy for a long time in the 90s until recently. That period of time, some economists call the Great Moderation 'cause the economy's working so well. When recent years the economies haven't been working that well, we had a financial crisis and this remarkably slow recovery. So to me the evidence is pretty clear that they should go back to these kinds of rules-based policies I call them that work so well in the past, and the sooner the better in my view.
