Thursday, April 21, 2016

Central Banking Has Run Its Course
"It must be tempting for the believers to again revel in the brute power of the 'perpetual money machine.' Yet the costs associated with the latest round of monetary inflation are steep. Not many months ago it appeared that China was determined to rein in excess, while the U.S. was ready to lead the world toward policy normalization. Today it’s become rather obvious that China is out of control and global policymakers are trapped at near zero or negative rates and perpetual QE monetary inflation. What was always sold as temporary extraordinary measures is increasingly recognized as desperate 'whatever it takes' indefinitely .. Around the world many had patiently accepted the favoritism and inequity of reflationary measures. But what was supposed to be extraordinary and temporary morphed into the normal and permanent: egregious wealth redistribution .. The course of global monetary policy increasingly lacks credibility. Patience has worn thin. Frustration and anger are being brought to the boil. Sure, global markets have gained momentum. But I actually think 'whatever it takes' central banking has about run its course, with momentous ramifications for global market Bubbles. Reminiscent of how I felt in 2008, global markets would be a lot better off had they taken their medicine earlier."
- Doug Noland, Credit Bubble Bulletin
LINK HERE to the essay

1 comment:

Anonymous said...

UK: A ban on state-funded academics using their work to question government policy is to begin on 1st May