by Tyler Durden
Via Mark J. Grant, author of Out of the Box,
“Always remember, your focus determines your reality.”
-George Lucas
Our reality has changed in the last twenty-four hours. The
Bank of England and the European Central Bank have re-affirmed their
old positions since the Fed has changed tacks. The initial reactions
will be a spike in equities and a fall-off in the valuations of the
Pound and the Euro to the Dollar. These, however, are first blush
reactions as the color fades from the bloom.
It may well be, as
Europe is in much worse financial condition than the United States, that
there is a policy reason for the European positions but it may well
also be a calculated move to devalue the major European currencies. Whatever the actual reasons, the European statements have certainly sounded the trumpet that the “Currency Wars” have reignited.
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Showing posts with label Bank of England. Show all posts
Showing posts with label Bank of England. Show all posts
Saturday, July 6, 2013
The Currency Wars Reignite
Etichette:
Bank of England,
central banks,
European Central Bank,
France,
Germany,
Ireland,
Italy,
Portugal,
real estate,
Reality
Saturday, May 11, 2013
It’s official: Global economic policy now firmly in the hands of money cranks
By Detlev Schlichter
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate;
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate;
Etichette:
angela merkel,
Bank of England,
Bank of Japan,
debasement of yen,
deflation in japan,
ECB,
Federal Reserve,
Mervyn King,
money cranks,
money printing,
paper money collapse,
Quantitative Easing
Wednesday, May 1, 2013
It’s official: Global economic policy now firmly in the hands of money cranks
by DETLEV SCHLICHTER
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate; an opportunity to cut off a bloated financial industry from the subsidy of cheap money;
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate; an opportunity to cut off a bloated financial industry from the subsidy of cheap money;
Etichette:
abenomics,
angela merkel,
Bank of England,
Bank of Japan,
debasement of yen,
deflation in japan,
ECB,
Federal Reserve,
Haruhiko Kuroda,
money printing,
paper money collapse,
Quantitative Easing
Friday, February 22, 2013
The continued wealth divide
By David Howden
Luxury carmaker Rolls-Royce’s 2012 financial results must have brought new worries to those concerned with the growing wealth divide.
Rolls-Royce reported a third consecutive annual sales record, the best results in its 108-year history. Priced at £170,000 for its cheapest model, it is safe to say that these sales were reserved for a small subsection of the wealthiest, perhaps the 0.01 percent. While the ongoing recession has left the masses paying off their debts and enjoying less consumption than before, the so-called one percent continue reaching for new heights and excesses.
What explains this growing divide, especially concentrated in the hands of a very few?
Luxury carmaker Rolls-Royce’s 2012 financial results must have brought new worries to those concerned with the growing wealth divide.
Rolls-Royce reported a third consecutive annual sales record, the best results in its 108-year history. Priced at £170,000 for its cheapest model, it is safe to say that these sales were reserved for a small subsection of the wealthiest, perhaps the 0.01 percent. While the ongoing recession has left the masses paying off their debts and enjoying less consumption than before, the so-called one percent continue reaching for new heights and excesses.
What explains this growing divide, especially concentrated in the hands of a very few?
Etichette:
Bank of England,
Fractional Reserve Banking,
Inflation
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