MOSCOW, April 9 A long period of free money and pumping up economies with it, a pandemic, trade wars and geopolitical aggravation have become the main reasons for the upcoming global crisis, said in an interview with an economist, former Russian Finance Minister Mikhail Zadornov.
“Firstly, an unprecedented period of zero interest rates, both in the US and in Europe, that is, money, in fact, was worth nothing for more than ten years. Therefore, there was an illusion that you could borrow it at one or two percent, for example for venture projects, and expect that in ten years your ideas will pay off,» he commented on the question of the reasons for the accumulation of imbalances.
The second reason was the quantitative easing programs conducted by the ECB and the US Federal Reserve, which pumped the economy with free money. Zadornov named the pandemic as the third reason, during which the authorities of many countries paid money to people and businesses, stimulating demand.
«Fourth, these are trade wars and protectionism — building barriers, complicating trade relations and a direct ban on the supply of a number of goods between the world's largest economies — the United States and China. That is, we have entered a period when when countries actually begin to move from free trade to closing their markets,” he said.
Finally, Western sanctions against Russia, which led to a change in supply chains and an imbalance in the energy market, are the fifth “stroke” of the upcoming global crisis .
Earlier, Zadornov stressed that the world economy is already in crisis for the first time since 2008, and huge imbalances have accumulated over this period.