The monetary policy and cheap money

Abstract

Central Bank takes set of several measures in situations where traditional instruments of monetary policy have no significant impact on macroeconomic aggregates. This happens when the benchmark rate reaches the lowest possible level. Since the beginning of 2015 we have witnessed the intense media coverage of economic developments, particularly in the monetary sphere, in the domain of the eurozone but also in the total area of the European Union. Here comes to injecting money into the financial system with new euro emissions, followed by lowering interest rates, that leads to policy of 'cheap money'. The world has changed too much that dollar or euro could be the main foundation of global finance. On the other hand, the post-crisis world requires a new architecture of the monetary base: instead of a single currency, foundation should be 'ancient money' in the form of gold. Money is not just an economic phenomenon, but the total social fact, which influences the life of almost all people.

Keywords

• monetary policy
• financial system
• interest rates
• cheap money
• gold