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The Money Taboo That Central Banks Have Shied Away From So Far [Yahoo! Finance News]

Evercore Inc. Class A (EVR) 
Last evercore inc. class a earnings: 4/22 06:00 am Check Earnings Report
) --The coronavirus economy is shredding records for government borrowing and for central-bank lending. Soon it may also smash the taboo that’s supposed to keep those two things apart.Governments paying for budget spending with loans from their own central banks is known as monetary financing. The risk, repeated throughout history from the Weimar Republic to parts of Latin America, is that it becomes a slippery slope in which politicians ride roughshod over central-bank independence, triggering runaway inflation as they splash what feels like free cash around the economy.The stricture against direct financing has held up even through a series of crises when central bankers did in fact buy plenty of public debt. They just made sure to do it in a roundabout way, snapping up bonds in the secondary market.But in a pandemic that’s placing unprecedented demands on budgets -– and could strain the capacity of bond markets to finance them -- some monetary experts say it’s time for exactly this Show less Read more
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