Stimulus & elastic money
It was reported this week that the UK unemployment rate remained at its lowest level since comparable records began, while the employment rate is also hovering at the highest levels on record.
Australia recorded a much better result yesterday, with the unemployment rate declining to 5.5 per cent, the lowest reported result since 2013.
In New Zealand the unemployment rate has dropped below 5 per cent, and in the US it is now all the way down to just 4.3 per cent.
Even the Euro area has at last been recording marked improvements, with the unemployment rate dropping into single digit territory.
Overall, then, respective stimulatory policies have by and large achieved their primary objective, at least in the short term.
'Normalising'
To date, the Bank of England has not succeeded in lifting its base rate, but with inflation rising recently more members are now leaning towards a hike.
In the US, the Federal Reserve believes that the recovery is on track and has already been hiking the Fed funds rate, up to 1 to 1.25 per cent.
Some have long argued that by choosing to stimulate the economy with low interest rates and quantitative easing - rather than allowing a deflationary correction to play out - even greater distortions and imbalances have been created.
These distortions include higher levels of debt, and lower savings, arguably paving the way for the next recession.
Despite the global money supply having been increased by trillions of stimulatory dollars, there have been few signs of the widely predicted rapid inflation in consumer prices, but there has been an inflation in asset prices and in debt loads.
A level of stronger inflation may now be considered beneficial by central banks, particularly if it helps to inflate away some of the accumulated debt.
So the argument goes, once inflation takes hold then inflation expectations will also rise faster still, leading in turn to even higher rates of inflation.
What has taken place over the last decade has been unprecedented in many respects, so nobody can say with any certainty what will happen next.
At the moment, though, there are few signs of runaway inflation.
