Earlier we mused whether in a world in which the central banks have failed to stimulate the money multiplier, and thus GDP...... the only possible way out, now that the epic stock of global debt makes an inflationary outcome improbable, is war. Perhaps there is another way. DB's Jim Reid points out something interesting: Financial innovation is a major positive driver of the money multiplier as it determines, among other things, the amount of leverage the banking system runs. Of course, the main reason the world is in the current predicament is precisely due to financial innovation. In fact, some 2600 years of ... (full story)