This page has been archived and commenting is disabled.
Stephen Roach Warns The Fed's Failed Policies Guarantee Another Crisis
Stephen Roach, chairman of Morgan Stanley Asia, has penned one of the most unapologetic letters bashing the central banking climate we have ever read from an institutional insider (he is still technically part of MS). And Roach should know: From 1972 until 1979, Roach served on the research staff of the Federal Reserve Board in Washington, D.C., where he supervised the preparation of the official Federal Reserve projections of the U.S. economy. As a result he is all too aware of the quality and caliber of Fed individuals. Which serves as the groundwork for this stunning speech presented on October 12 before the World Knowledge Forum in Seoul. The topics covered include the creation of, and asset bubble "resolution" authority , the collapse of America into a Japanese deflation death spiral, the general destructive worthlessness of the Fed, and other such pleasant issues. Most importantly, Roach speaks out in all too clear terms against another "hyper stimulus" round: "Whether it’s the latest round of quantitative easing now under way by major central banks or the polarizing tax cut debate in the US, there is a limited likelihood these measures will achieve meaningful traction in the real economy. The authorities would be much better off not wasting the next stimulus on policies that won’t work and better disposed toward taking actions that are directed at providing support to the true victims of this recession— namely, the structurally unemployed and underemployed." Roach's dire warning: "I fear that unless regulatory reform is accompanied by a rethinking of monetary policy, another crisis is far more likely than not."
And the conclusion, which is pure poetry for anyone whose number one desire is nothing less than to see the end of that most destructive and criminal of organizations, Roach says it best:
Contrary to the view of many, the Great Crisis didn’t have to happen. I reject the excuse offered by many of the apologists that it was a once-in-a-century tsunami that would have occurred in any case – that policy makers could have done little to forestall the outcome. Yet nothing could be further from the truth. Defensive and steeped in denial, policy makers are ducking responsibility.
The recent crisis is a painfully visible manifestation of the greatest failure of central banking since the 1930s. Out of basis points, relying on dubious quantitative easing strategies, and still agnostic when it comes to coping with asset and credit bubbles, monetary policy has become the weak link in the daisy chain. Yet in the rush to re-regulate, central banks have largely been let off the hook. Nor are ever-profligate fiscal authorities exactly a beacon of hope in this crisis battered world.
Out of the darkness of the 1930s, a new approach to fiscal and monetary policy was borne. That renaissance is now over. The Great Crisis of 2008-09 demands a rethinking of the strategy and tactics of orthodox stabilization policies. Glaring shortcomings in our policy architecture must be addressed if the world is ever to learn the most important Lessons of Japan. As day follows night, a failure to learn these lessons almost guarantees another crisis in the not-so-distant future.
h/t JM
»
- 9054 reads
- Printer-friendly version
- Send to friend
- advertisements -
Does he give any advice on how to extract these people from their roles?
What does it matter? He offers no solution either because there is no solution that humans want to hear.
Fed does nothing = instant collapse in 2008
Fed tells everyone the helicopters are coming = eventual collapse, slow down the rate of decline
You and the rest of the lemmings are running from something you will never escape. The solution is the same solution every time.... collapse and liquidation of the non-performing liabilities.
"learn the most important Lessons of Japan"
Hahah, sorry humans haven't learned much in 1000s of years. They can't even do simple Math.
I see no mention today of what is happening with the Bloomberg vs FED on the Freedom of Information act. Today ( OCT 19th ) was the deadline for the Fed to make what would be their final appeal, this time it would be to the " now rigged" US Supreme court.
"On August 27, 2010, the court agreed to delay implementation of the ruling until Oct. 19 so that the Fed may appeal to the Supreme Court."
Does anyone have an update on this ?
yes, well, that speech was wonderful, but, now that the country has been looted, it's industrial base destroyed & the average person can't even find a WALMART or PANERA job to make payments on overvalued houses........ well, looks like WE'RE ALL JUST HOLDING THE EMPTY BAG !
Yes, and if we could only get the fuckers to look down and actually realize the bag is empty, then, at least, something useful will have occured.
Link:
http://www.docstoc.com/docs/57641514/MS-Japan-Syndrome-Goes-Global-2010-10-15
There's no need to worry, a good war fixes everything
There's no need to worry, a good war fixes everything
The US is already waging 4 wars.
"Game over man, game over". What are we gonna do now?
I dont know what to do now, 'get to da choppa', etc, etc...
In Aliens, did it involve fission or fusion? I prefer the the warm coming together feeling of fusion.
So now its really just all about saving face for the FED, got to save Keynesian Economic Theory at all costs...wow thats just GREAT! Yep lynnybee, the country is now about the Ivy League billionaire manipulator crooks saving face while people cant even find a Walmart job. Just GREAT! Bagholder USA!
how can we protect ourselves against the coming crisis? Gold? Silver? PMs have been knocked down by more than 2%. What a tragedy...
Take a look a a chart of PMs over a month/year/decade, then breathe.
Have we liquidated the non-performing assets? Are we on our way to a structural and cyclical recovery? Will they ever stop printing?
Easy. Just overpay for some shares of APPLE and your life will suddenly be rosie. Your central nervous system will be bathed in Jobs waves, and all worry will go away. Your body will suspend above the ground, and the path forward will be clear. Gravity will release you to become the celestial body that you were truly meant to be.
Snap.
"As day follows night, a failure to learn these lessons almost guarantees another crisis in the not-so-distant future."
But crisis is happening now. As currency war escalates financial crisis is in full morph ot political crisis.
So that is why SKorea now wants to buy gold!
2006/7 = 100
2010 = 60
2012 = 40
Fed thinks counterfeiting $ and accounting fraud
will increase the 40....
When it actually reduces the 40....
Looks like a rock & a hard place.........
The Biggest Bet of All Time; by Larry Edelson
http://howestreet.com/articles/index.php?article_id=14888
Larry may mean well, but his "if i were Ben...I'd do exactly what he is doing..." ideas are flawed. If Bernanke had really wanted to draw back the real curtain for all to see, and move us to the global commodities basket backing of a new currency, he'd save us from all the bullshit of further QE and do it at the G20... yeah, right. There's still plenty of looting left to do. 55% of Americans don't even need food stamps yet. And then they'd have to explain how the money is already global, doesn't sit well with the patriotic.
Watching Steve LIESman on CNBS and I've never seen a bigger Fed Gov. wannabe in my entire life. What a complete idiot!
I would tell Mr. Roach that it's the success of the Fed's policies that create disasters, otherwise they wouldn't bother.
They've created the greatest wealth transfer machine, ever. How else could they come to own everything?
YOU SAID IT !!!!!!!!!!!!!!
Today marks an important turing point for global markets and the USD strength I warned about has arrived.
http://stockmarket618.wordpress.com
Liesman = "Bumboy" for the Federal Reserve. He volunteers to be in the barrel!
Classic brown noser.
I have loved this man from the first research report i ever read by him...he is a truth telling sage.
Lesson #1: Do not create imbalances.
Lesson #2: See Lesson #1.
The fact is, recession and depression are literally necessary cures for previous "central planning" by "central banks" or by federal government.
The lesson is, eliminate all powerful entities, and government must stay OUT of the lives of individuals (and businesses) except to hammer anyone guilty of harming another individual or property, or fraud.
The "economy" should be nothing more than the sum of all fully voluntary, uncoerced, unmanipulated transactions of individuals. Period.
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
cheap vps
windows vps
cheap hosting | ucvhost