Posted on 09/23/2016 3:39:53 AM PDT by expat_panama
THEY do not naturally crave the limelight. But for the past decade the attention on central bankers has been unblinking—and increasingly hostile. During the financial crisis the Federal Reserve and other central banks were hailed for their actions: by slashing rates and printing money to buy bonds, they stopped a shock from becoming a depression. Now their signature policy, of keeping interest rates low or even negative, is at the centre of the biggest macroeconomic debate in a generation.
The central bankers say that ultra-loose monetary policy remains essential to prop up still-weak economies...
...But a growing chorus of critics frets about the effects of the low-rate world—a topsy-turvy place where savers are charged a fee...
...independent central banks can act immediately to loosen or tighten as circumstances require.
Small-government Keynesianism
Politicians will not—and should not—hand over big budget decisions to technocrats. Yet there are ways to make fiscal policy less politicised and more responsive. Independent fiscal councils, like Britain’s Office for Budget Responsibility, can help...
...Central banks have had to take on so much responsibility since the financial crisis because politicians have so far failed to shoulder theirs. But each new twist on ultra-loose monetary policy has less power and more drawbacks. When the next downturn comes, this kind of fiscal ammunition will be desperately needed. Only a small share of public spending needs to be affected for fiscal policy to be an effective recession-fighting weapon. Rather than blaming central bankers for the low-rate world, it is time for governments to help them.
(Excerpt) Read more at economist.com ...
The Central Planners/Bankers created the world’s mega asset and debt bubbles/over-indebtedness. Having enabled it and distorted markets and investment decisions world wide for decades, in collaboration with financial system/Wall Street insiders and politicians who want to blunt business cycle downturns, the magnitude of the cumulative problems have become enormous and their object has become simply to avoid or delay the unavoidable Day of Reckoning.
That which cannot be sustained will not be sustained. The losses and insolvencies already exist, the world’s debts largely never will be repaid; the only questions that remain are how those losses will be allocated (to whom), and the timing of when they will be acknowledged/admitted.
When losses on bad debts must be addressed, Central Bankers and politicians will do their best to quietly socialize those losses and spread them in stealth ways such as through negative interest rates, target inflation rates, and understated inflation measures and GDP deflators.
In the meantime, to keep the Mega-Ponzi going, the primary tool of choice will remain the pursuit of more debt and more currency unit creation (liquidity creation). The wizards of smart have created an enormous problem that the world’s savers, investors and workers will ultimately have to bear.
they stopped a shock from becoming a depression.
I believe we are in a depression despite the intervention. The central banks just kicked the can down the road and ultimately made the situation worse.
Spot on summation, JTT.
The Economist has just broadcast TPTB plans for responding to the impending correction:
For that, more automaticity is needed, binding some spending to changes in the economic cycle.
The duration and generosity of unemployment benefits could be linked to the overall joblessness rate in the economy, for example.
-> Sales taxes, income-tax deductions or tax-free allowances on saving could similarly vary in line with the state of the economy, using the unemployment rate as the lodestar.
(Comment: since when are gov’t stats to be trusted? Current 5% unemployment rate is currently four times that, using pre-1983 BLS calculation methodologies).
All this may seem unlikely to happen. Central banks have had to take on so much responsibility since the financial crisis because politicians have so far failed to shoulder theirs. But each new twist on ultra-loose monetary policy has less power and more drawbacks. When the next downturn comes, this kind of fiscal ammunition will be desperately needed. Only a small share of public spending needs to be affected for fiscal policy to be an effective recession-fighting weapon. Rather than blaming central bankers for the low-rate world, it is time for governments to help them.
(Comment: Aww, poor innocent well-intended Central banks, cry me a river. What’s a corrupt Banker-in-bed-with-stock brokers multi-Millionaire executive to do?)
Anyway, everyone knows that Rothschild owned Economist magazine has promoted a NWO one world currency since 1988 and 1998, right?
One world, one money | The Economist
www.economist.com/node/166471 Proxy Highlight
Sep 24, 1998 ... A global currency is not a new idea, but it may soon get a new lease of life.
All deliberate.
See post 4.
“The main tool for fighting recessions has to shift from central banks to governments.”
$20 trillion in debt isn’t enough?
They seem to want a slow, but total, collapse.
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