Uday Kotak compares Central banks printing money to sort economic woes with climate change

Uday Kotak, Managing Director of Kotak Mahindra Bank, on Saturday said that the central banks and sovereigns across the world have one medicine to address all problems .i.e. to print money. Doing this, according to him, distorts "value and values."

"Central banks and sovereigns globally have 1 medicine for all problems: print money. Distorts value and values," Kotak said. His remarks suggest that every time printing money is not a solution as it does not lead to rising in economic output.

"Like climate change, it is the future generation’s problem. We need to solve it, not kick the can. The future is here. Future is now," the veteran banker added.

Whenever in crisis, the central banks have resorted to printing money to get away with it. Kotak's remarks come at a time when central banks globally are pumping money into the market to overcome the pandemic.

Since the Global Financial crisis of 2008-09, Central banks have plunged interest rates and pushed money into the markets to drive economic growth. The excess money found its way into the bourses and zoomed the markets worldwide. However, the problem will arise when the liquidity begins to dry up and there will be people with these assets but there will be fewer takers. This will also lead to a surge in commodity prices and soaring inflation.

Uday Kotak says the problem of continuing pumping up money will affect future generations like climate change. He says that efforts should be taken now rather than 'kicking the can'. "The future is here. Future is now," Kotak said.

Image: Twitter/@UdayKotak