Monday, May 30, 2016

The Business Of Central Banks 
Is Like Pornography?
Economist Eugene Fama thinks that interest rates will not help to bring back economic growth, & he warns that big banks are still posing a high risk to the financial system .. Central bankers are taking more & more extreme measures to stimulate growth. However, their actions don’t have any impact on the real economy, says Fama .. "Everyday we read headlines on what the central banks are doing. But their policies don’t have any effect. They are just like treading water. All the central banks are doing is substituting one form of debt with another form of debt. They’re issuing short term debt and using it to buy long term debt. In finance, we tend to think that’s a neutral activity, even though those stimulus programs are huge. So basically, I think it means the business of central banks is like pornography: It’s not the real thing."
LINK HERE to the article

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