Quantitative easing « Dr Alf's Blog

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According to Ben Bernanke, former head of the Fed, student loans are mostly backed by the government while mortgages, which sparked the 2008 financial crisis, were held by publicly traded financial institutions susceptible to panic.

Source: Bernanke says student debt no threat to U.S. financial system | Reuters

This article by Reuters highlights the skyhigh levels of student debt in the US, set against a poor outlook for jobs. Without wealthy parents, ambitious young people are forced to taken on student debt. This situation will no doubt color the views of many young Americans ahead of the US presidential election.

This article highlights the risks for young people in other countries, with high levels of student debt. In Europe for example, it is hard for young people to find proper jobs to utilize effectively their education. Typically, student debt levels in Europe do not yet reach American levels.

Part of the problem is to do with technology changing the outlook for jobs and educational establishments not matching educational services with demand for jobs.

Thoughts?

English: The Marriner S. Eccles Federal Reserve Board Building (commonly known as the Eccles Building or Federal Reserve Building) located at 20th Street & Constitution Avenue, NW in the Foggy Bottom neighborhood of Washington, D.C. Designed by architect Paul Philippe Cret in 1935, construction of the Art Deco building was completed in 1937. Its 2009 property value is $109,029,200. (Photo credit: Wikipedia)

This is an insightful, must-read article from leading macro-economist, Gavyn Davies, writing in his FT blog. Check it out!

China’s policy failings challenge the Fed | Gavyn Davies

Personally, I’m of the opinion that the Fed will delay an interest rate rise. However, if there’s continued volatility in financial markets, the probability of more quantitative easing increases.

Gavyn Davies provides some sound economic policy options for China and it will be interesting to see what transpires.

Thoughts?