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VIsualizing The Coordinated Global Monetary Response
The presented interactive chart from the WSJ tracks the intervention by global central banks in the monetary realm. It should come as no surprise that following the Lehman failure, virtually the entire world went from red (tight liquidity) to green (loose, and ostensibly for most, ZIRP). It is fairly safe to say that when it comes to America, ZIRP will stay forever, as the elimination of a -7% Taylor Rate equivalent offset to rates will annihilate capital markets of all shapes and sizes, which continue to levitate solely on free money promises and micro trading feedback loops. Incidentally, we are willing to immediately cede that there is indeed an economic recovery: all that would take is for Bernanke to stop QE2 immediately, and certify that no incremental forms of quantitative easing will occur. Let's see what happens to stocks, pardon, the economy, and naturally the wealth effect, following such a pronouncement. Another observation on the chart below: note the monetary reaction in the developed-developing world in the last year. This is only driven by the increasing unwillingness of the BRICs and their derivatives to import Bernanke's excess inflation. This is precisely what will be the defining topic of 2011 newsflow (together with Europe's further plunge into insolvency, and as always geopolitical news).
And for some additional amusing observations on the topic of coordinated monetary intervention we turn to the Global Macro Monitor blog, which observes the "great monetary policy swan dive."
Great chart from the OECD illustrating the dramatic actions taken by the
world’s major central banks during the financial crisis. The massive
collapse in short-term interest rates has reduced income of savers and
the splash of the heavyweight central banks has displaced yield seeking liquidity causing it to flood into the emerging markets and commodities. “John Bull can stand many things, but he can’t standtwozero percent!”
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US...debt....CDS(States...) California C-4
And this one...
USDCHF alert
http://www.rankia.com/respuestas/637913/images/29561
Oddly, MCDX has not moved much yet. It will.
it's not easy to be a central bank... play the game :)
http://www.ecb.int/ecb/educational/economia/html/index.en.html
But we've moved beyond 'providing low rates to help foster increased economic activity' and have moved into 'Central Banks will do whatever it takes...' - to do what isn't mentioned, but the threat/promise is very real. You could have written that Credit risk will continue to be mitigated at significant institutions'- that's the game now, to make downside risk low...by rapid inflation, because everyone now expects QE3!..if it isn't already under way.
The Bernank: "OK everybody, this is a stick up. No fast moves or the US taxpayer gets it..."
a bit off topic, but I can hardly find an article anywhere announcing a +$30 daily close to silver. Not even here on ZH?!?! Anyways, it's good news to me.
"Quiet please as A(r)gent-0047 begins his final ascent..."
Yes, completely overlooked by the MSM financial networks. Also missing from the news flow are stories regarding the bankruptcy of the FED if interest rates climb higher putting all the items on their balance sheet underwater. This needs to have some featured coverage to expose the FED's achilles heel.
Bernanke can go up in smoke like the Hindenburg if he looses control of interest rates. The Chinese can apply pressure as necessary to either keep him in line or blow him up as they see fit.
the free money will never end. because the recovery is based on releveraging. to raise rates would expose that there is nothing beneath it. insted of using ther finaicial crisis to deleverage and build a more stble future the fed has ruined it. Honestly, I'd go to jail if I said what I wanted to
Spot on! I suppose the historians and University economics professors will now preach to the next generation of students that it is impossible to defeat the free market - even with a totalitarian Keynesian-Marxist Central Bank.
Regarding the "Swan Dive" chart two things jumped out at me.
One, that the US (FED) is expected to begin to raise interest rates. And what exactly does that do to the debt service obligations of the entire $14 Trillion dollar deficit that needs to be rolled over every 4 plus years?
Two, I see Japan is expected to scrape along the bottom for the next few (100) years. That's comforting considering they've been in the basement for the last 20 years.
My lab-mate (fellow student) just got back from twenty+ days in India, her first trip in a couple of years. She reports that meals which cost 100 rupees back then now cost more than 450; the price of gasoline in her area has more than tripled; and people are not bunkered, they pay these prices (presumably their wages have increased to match, or nearly).
Exported inflation appears to be nearly unimpeded; we will see it next, and horribly when the Crunch comes and dollars become green toilet paper.
As a relative newbie, there is something I have not puzzled out: the "Bitchez" formulation. Is this a compliment, a snark or an insult? For example, if I post "Guns, food and precious metals, bitchez!" am I:
(1) Snarking at those who don't own these, because I do?
(2) Laughing at those who do, because I don't believe in them?
(3) Admiring those who do, because I do too?
(4)?
Please advise, if you can. Thanks!
lol !!!
The intent is more of an "I'm telling you so" with the hope that it can eventually be "I told you so"
You are my "bitch" cuz I know what I am talking about and "own" you because you are a weak-minded, undecided, fence-sitting idiot. So much for intent.
Now please consider who may be writing it :-)
Many thanks, I understand now.
Therefore:
Guns, food and precious metals, bitchez!