What do you do when your stimulus fails to stimulate?

"The Wall Street Journal recently issued an oxymoron alert that high-yield bonds had gone negative. The report says 14 European companies with junk bonds worth more than 3 billion euros ($3.38 billion) are trading with negative yields," wrote Prof VA Nageswaran. "Globally, about $13 trillion of debt is trading at negative yields." "Greek government 10-year bonds are trading at a yield of less than 2.5%. The yield, a few years ago, was at 44%," he wrote earlier. "The common thread that binds all of these is financialization, and it has been fueled by central banks." What about India? The last budget proposed "borrowing by the sovereign state in foreign currency" and "liberalized foreign financial flows", along with higher import duties and higher taxes on the rich. There is also a proposal for "deepening of the corporate bond market, including the market for credit default swaps." "Credit default swap (CDS) is, in effect, insurance against non-payment. Through a CDS, a buyer can avoid the consequences of a borrower's default by shifting some or all of that risk onto an insurance company or the other CDS seller in exchange for a fee." However, when everyone starts lending to subprime borrowers in return for higher returns it can lead to a crisis, as in 2007-08. "Since the global financial crisis, the total value of outstanding corporate bonds has doubled, from around $37 trillion in 2008 to over $75 trillion today," wrote D Quijones. This is because of very low interest rates which have resulted in "reckless risk-taking in financial markets, more leverage, greater inequality and tremendous stress on savers, bank deposit holders and pensioners". Despite record low interest rates central banks are unable to increase inflation so now they are concentrating on price stability and stability of their currencies. Economists are predicting a recession in the US next year. "The highest proportion of respondents thought the slowdown was likely to hit in the third quarter of 2020." "A full-blown currency war where major central banks and governments, including the US, deliberately weaken their currencies can no longer be ruled out, Pacific Investment Management Co's global economic adviser Joachim Fells wrote in a report." "Gains in global personal wealth ground to a near halt in 2018, rising just 1.6% for the weakest growth in five year." Total private wealth stands at $206 trillion, while the "World economy, comprising 193 economies, in 2019 is projected around of US$88.08 trillion in nominal terms against US$84.84 trillion in 2018, according to IMF." Prof N Roubini predicted a global recession in 2020. Of course, if you keep predicting a recession, someday you will be proved right, but the combination of the trade war, tension in the Gulf, stubbornly low inflation, increasing debt, and ever increasing stock markets is a cause for worry. Politicians do not want to do anything different in case they are blamed. If there is a crisis they can blame the world. We are just helpless pawns.