Megalextoria

Oh what a tangled web central bankers weave when they practice to deceive… Last night’s panic in Tokyo, where the Nikkei dropped a stomach churning 7 per cent, demonstrates just how difficult it’s going to be for the world’s central banks to exit their loose money policies.

It’s not even as if Ben Bernanke, chairman of the Fed, said he was planning to exit; in fact, initially he said the reverse in testimony to Congress. It was only in the Q & A, and in minutes to the last meeting of the Fed’s Open Markets Committee, that a clear bias emerged to slow the pace of asset purchases “in the next few meetings”, so long as the economic data was strong enough.

What the subsequent violent gyrations in markets indicate is that any hint of applying the brakes risks generating a fresh financial crisis, which in turn would render the economic recovery still born. Both financial markets and the real economy have become addicted to “quantitative easing”, such that they can’t do without it.

The upshot is that we are going to see financial repression of the type being practiced in virtually all the major advanced economies – including, if only to a more limited extent, the eurozone – continue out into the indefinite future.

Full article: http://blogs.telegra … l-of-money-printing/

The Federal Reserve held fast to its ultra-accommodative monetary policy Wednesday, solidified by what board members described as an economy weakened by fiscal policy.

Interest rates will remain at historically low levels while the U.S. central bank will not alter its $85 billion a month asset purchasing program, the Fed’s Open Markets Committee decided at this week’s meeting.

While recent meetings have been remarkable for signs of dissent over the long-standing Fed policy, the sentiment this month turned towards concerns about “downside risks” to growth, though the FOMC made no mention of the recent set of weak economic data.

Language in the FOMC statement after the meeting saw one notable change – a declaration that it would increase or decrease the pace of its asset purchases depending on conditions.

The committee statement passed by an 11-1 vote, with Esther L. George again dissenting over fears that massive Fed money-creation could spur inflation. The central bank’s balance sheet has ballooned to more than $3.3 trillion.

Full article: http://www.cnbc.com/id/100695681