Central banks have created an environment where major downturns as well as expansions are almost impossible, the investor said.
segment. "We have completely taken away the toolkit of how normal economies should work when we started with QE. I mean, the odds that there's a recession anymore in any western country of the world is almost next to impossible now, save a complete financial externality that we can't forecast."
A lack of downturns is not necessarily a god thing, Palihapitiya added, and he criticized central banks for refusing to allow normal economic cycles to play out. "Central bankers have lost all intestinal fortitude to actually put a country through a recession, because it's actually regenerative and useful," he said. "Even if they had the wherewithal to do it, the political infrastructure will just completely absorb that intent. So we are probably not, save of something crazy, going to see massive, massive negative growth except in countries that are so fundamentally crippled that they tip over.
Palihapitiya is the CEO of Social Capital and he also is a minority stakeholder and board member of the Golden State Warriors NBA organization.
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