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Stop the press. Literally! - BAML

FXStreet (Barcelona) - Ethan S. Harris, Global Economist at Bank of America Merrill Lynch explained the financial press loves to boil down complicated economic issues with clever buzz words.

Key Quotes:

"Perhaps the biggest current example is "secular stagnation" - the idea that the recent weak recovery in the US proves that the economy cannot grow without near-zero interest rates."

"As our readers know, we see nothing secular about the recent stagnation”.

“In our view, the Fed's super-easy monetary policy has been necessary to offset hurricane headwinds from post-crisis deleveraging and repeated austerity and confidence shocks from fiscal authorities. "Secular stagnation" rolls off the tongue nicely, but it mistakes temporary headwinds for permanent headwinds."

"Perhaps the second most popular buzzword is "currency wars" - the idea that major central banks are trying to steal aggregate demand from other countries by weakening their currencies. Until recently, the Fed was allegedly the number one offender; last year the BoJ assumed the mantle and now the ECB has supposedly declared war. Is the world at war?"

"We don't buy it: exchange rates are just one of the many channels of stimulus from easy monetary policy. Easy policy not only stimulates the domestic economy, but most macro models suggest it is a net stimulus to the rest of the world as well.”

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