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Opinion
Jim Bianco

Central Banks Are the Biggest Risk to the Economy in 2020

The Fed’s reaction to the disruption in repo markets shows how hard it will be for policy makers to reverse their “money printing.”

Central banks have been too willing to flood the economy with cash.

Central banks have been too willing to flood the economy with cash.

Photographer: Chung Sung-Jun/Getty Images

The U.S. economic recovery that began in June 2009 is now in its 127th month, which is a record. Even more impressive is that for the first time since the signing of the Declaration of Independence in 1776, the U.S.  just completed the first calendar decade without even one day of a recession. There are a few key reasons why this is happening, and one clear risk that could bring the expansion to an end.

The natural trend for an economy is to grow. A recession only occurs when something “breaks.” So, this record expansion is happening because nothing has broken. The primary reason is new technology that gives businesses more flexibility to adapt to changing conditions.