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Central Bankers, Fear And Other Bad Counselors
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
The original idea behind a central bank is that medium and longer term monetary policy should not be allowed to be held hostage by a short-term prevailing political wind, that an incumbent politician and his/her party should not be permitted and/or enabled to manipulate a nation’s currency for political gain. A central bank was (and still is officially) supposed to be independent of politics, to be a buffer between a society’s long term interests and a politician’s short-term ones.
In particular, no-one should issue huge amounts of money to make it look like they were just awesome leaders that make everyone rich, while sinking the future of a society in the process. I know, I know, there are tons of other ways to explain the drive to found central banks, just google Jekyll Island, but the issue of economic stability vs fleeting political flavors is certainly a big one.
So. Have we come a long way or what’s the story? Today’s central banks do nothing BUT engage in short term policies that keep incumbents as happy as they can be in bad economic circumstances. Central banks have become political instruments that pamper to the tastes of whoever may be in charge on any given day, which is the exact 180º opposite of why they exist in the first place.
And because they’ve gotten so far removed from what they’re supposed to be doing, central bankers start to realize they’ve ended up in completely unfamiliar and uncharted territory. And now they are, like anyone would be in that kind of position, scared. Sh*tless. And as we’ve all learned from kindergarten on is that fear is a bad counselor. They may have risen to positions of oracles and household names (also entirely contrary to their original job descriptions), and they may have fallen for the flattery that comes with all that, but deep down they know full well they’re way out of their leagues.
The best they can come up with is trying to bluff their way out of their conundrums. Because it’s not as if they don’t understand that doing exactly what they were intended not to do, i.e. flood markets with cheap money not based on any underlying real values, or work performed, will of necessity at some point blow up in their faces. They just hope and pray it will take long enough for them to be somewhere else, enjoying a Banana Daiquiri when that mushroom appears on the horizon.
Central bankers have been reduced to political toys, and they – at least at times – realize that’s not a good position to be in. If only because it makes them redundant. If they only simply do what politicians want anyway, we might as well just let those politicians set monetary policy by themselves.
That puts central bankers in a situation in which they are being set up as patsies, to catch all the bad rap if and when things get even worse then they already are. And they will. Moreover, obviously it’s not the politicians that decide, but the people who finance their campaigns (they do need long term policies), and once you realize that, you really need to wonder what kind of court jesters Bernanke, Yellen, Draghi and Kuroda have become.
Now that we’ve come to naming names, look at them: Draghi today did another press-op in which he blubbered about what he’ll do about inflation, and fast. But there’s nothing blooper Mario can do to make people in Europe spend their money any faster, if only because they don’t have any money. And his banking overlords won’t let him hand out money to the people even if he would want to (dubious for a Goldmanman), so boosting that consumer spending is never ever going to work.
All Mario gets to do is spread the alarm, and then catch the fall. But you know, you’re thinking, doesn’t he know what’s going on, and he may well know very well. In the end that’s just a sad story, and because of the role he plays he deserves to never again have a single night of solid sleep. His role is just too ambiguous. And most of all, it hurts too many innocent people.
The Fed has Janet Yellen, who’s trying to contortion her way into explaining that the US economy is doing so well she just must raise interest rates, which is so far off reality it’s not funny, but it’s the going story, because her paymasters on Wall Street need or want more profits, and they’ve gotten all they could out of the zero % policies now that every mom and pop is on the same side of the trade as they are.
All I can think when I see her pop up again is why would anyone, let alone Janet herself, want to be in her position? Where’s the satisfaction? Why not go live somewhere out on Martha’s Vineyard and let others do the damage? What drives these clowns?
The Bank of Japan’s Haruhiko Kuroda is perhaps the most overt and obvious political tool of them all, who does only what PM Shinzo Abe tells him to, and drives his country into a deep dark stinking swamp while he’s at it. Kuroda doesn’t even know how to spell ‘independent central banker’.
And talking about bad counselors, Bloomberg reports on a meeting Abe had with Paul Krugman, who won that Fake Nobel a few years back for the same single two words he undoubtedly told Abe: Spend and More. If any country today could benefit from having a truly independent central bank it’s Japan, But of course, the Bank of Japan is, if anything, even less independent than the rest of them.
What drives central bankers in November 2014 is fear, pure and simple, if not absolute screaming panic. Together, they’ve literally spent untold trillions of dollars, and what is the result? People everywhere across the planet slow down their spending more and more. And that means deflation. Which is what they’re all supposed to be so afraid of. But which they also all know cannot be averted.
And then this morning we see that the Chinese central bank People’s Bank of China, PBOC, has lowered its interest rate targets. The PBOC chairman’s name is Zhou Xiaochuan, and there’s of course plenty reason why nobody knows that name. That is, nobody even expects the PBOC to be independent from the rulers.
Which is somewhat curious, because the role Zhou plays is no different at all from that of Yellen, Draghi and Kuroda. The only difference is the pretense that the latter are not political toys and instruments and kow-towing fools.
Why does Zhou lower interest rates? Because he’s scared. Well, he and his forbidden city masters. China’s economy is falling so much so fast that they see the historically by far biggest ever debt-driven economic model implode on their watch. Xi and Li and Zhou fear the wave that’s coming for them, and given the size of the Chinese economy, no matter how fake and debt-based it is, we should all share their angst.
Japan is dead, a zombie with lipstick, and still the world’s no. 3 economy. One more reason for all of us to be afraid. Add in Draghi whose only resort is to find different ways of saying the same thing he will never ever be able to do, to buy everything in Europe that’s not bolted down and then buy the bolts too, and you have am entire world that should be scared straight out of their undies.
Which makes Janet Yellen’s task of defending the upcoming rate hikes all the more amusing. Yeah, sure, the US economy is doing great. Sure, grandma. Look, we all know your place in history will be that of someone who was either too complicit or too stupid while the walls were crumbling. And we all know today that you’re scared to even open your mail in the morning. Because we all know as well as you do that the picture of the US economy that you paint is a virtual reality. The only question is, do you yourself actually live in it?
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That is NOT the headight on an oncoming train....it's the glow of our awesomeness.....
Oncoming train is not the best analogy. Better analogy is standing over a time bomb and not being able to see the countdown. Even if the train is moving quickly, you have some time to react and get off the track. Time Bomb, not.
Politicians are always short sighted and think of now because they know that's what wins them votes - anything else would be counter productive to their aim. Printing money at future expense is simply; for the future to worry about...
This article had legs until I read this "That puts central bankers in a situation in which they are being set up as patsies, to catch all the bad rap if and when things get even worse "
Then it started to look like someone was just trying to provide them some cover.
I basically came into the comments to say the same thing. That and painting these people as poor, terrified peons is not going to make me feel sorry for them, even if there were even the tiniest grain of truth to it...which doesn't pass the smell test.
If they are poor, terrified people they have only themselves to blame. They didn't allow the system to clean itself in 2008, they haven't MANAGED anything since 2008 only blowing another bubble to get back to 'normalcy' (the BUBBLE of 2007 ish) and they don't or won't, understand that no matter how much money or inflation is pushed into the system, if the people don't have the money to spend, THEY WON'T SPEND ANYTHING.
Volcker had balls, NONE of these fuckwits has any balls to do what is needed. I've always said that the Dow should have been MANAGED in the 12,000 to 14,000 range to allow time for things to gradually improve rather than blowing up another bubble. Pathetic.
DavidC
Personally, I think there will be so much blame to spread around that all of them will get their share - bankers, government, large companies, the rich. Once we're out of those, there will be enough blame left over to spread blame around to people like professors, other intelligencia and white collar workers. Once we're out of those we will become darkly suspicious of housewifes, plumbers and electricians.
Cental bankers are the bartenders for the drunk customers of government. The customers have guns and a credit card linked to taxpayers' accounts.
Central banks are an extension of the idea of central planners in the all important arena of monetary policies and finance. The entire concept from the outstart is flawed.
Central planning requires disinterested parties with superior morals and infinite wisdom. They must be able to look past their own selfish interests and read the future and complexities of an economy flawlessly. This does not happen in the real world so they become stooges of government and self interest.
The idea of central planning is like a government planner with a two week course in botany looking at a rain forest and saying, "I can do better than that!"
Sorry, but this is complete and utter bullshit. Since when would any central bank especially those of North America have any fear or panic when this has been planned decades in advance. Politicians(parasites), central bankers and bankers(fucking parasites) are complicit, wilfull, cooperative, propagandic, manipulative,and power hungry. Were scared, were scared!!!!! Playing up this mantra takes away from the malicious intent of people who can and will distort reality through media and destruction of said currencies we are forced to use and be taxed(raped) on.
No need to apologize, Toxicosis!
Central banks were the triumph of applying the methods of organized crime to the political processes ...
EVERYTHING THAT CENTRAL BANKS WERE "SUPPOSED" TO BE IS THE OPPOSITE OF WHAT THEY ACTUALLY ARE!
Central banks are NOTHING BUT legalized lies, backed by legalized violence, engaging in a business model based on ENFORCED FRAUDS. The main thing that happened throughout the history of Neolithic Civilizations was that slavery systems became more sophisticated. Central banks are the core of a debt slavery system, which has generated numbers which have become debt insanities.
Tragically, there are good reasons to be afraid, since the real world IS controlled by systems of lies backed by violence, which have grown at an exponential rate throughout the history of Neolithic Civilizations. War Kings gradually morphed to become Fraud Kings, which are the National Central Banks, while the Bank of International Settlements is the current King of Kings of Fraud.
We are living in a Bizarro Mirror World Fun House, where everything is proportionately backwards and distorted, due to the long history of the people who were the best at being dishonest and backing that up with violence being able to more and more dominate political and social institutions, so that the biggest gangsters, the banksters, are presented as somehow being the "good guys," because they have already also dominated their controlled opposition groups too.
THE BACKGROUND REASONS ARE THE REAL PRESSURES OF NATURAL SELECTION, WHICH ARE TOTALLY TANGLED UP IN TABOOS, SINCE THE ESTABLISHED SYSTEMS WERE BASED ON ENFORCING FRAUDS, FOR GENERATION AFTER GENERATION!
Right Goldman Sachs is a political toy.
Arrest Loyd Blankfein and end the FED. Arrest Loyd Blankfein and end political corruption. -bitchez.
Like I have been saying for 5 years. The Fed only cares about what it will take to not have stocks and bonds crash TODAY...tomorrow is not even on the radar.
2014 Central Planning has become the next Kamikaze Plane. Just like Peal Harbor, and 911 NYC debacal.
What have you been smoking. Banksters aren't subject to orders from the puppet politicians they control.
They issue instructions to the corrupt political monkeys they choose/purchase.
You better get back on your meds.
Pure Zionist fear in losing control. See below. No meds asshole, true facts about your fate in the future. Get a EBT card, you'll need it. We will defund it. Welcome to poverty fucknuts!
Start drinking your Gravatar Kool-aid image. Kick your boss in the nuts for me.
We need something like a Google DebtView service where houses and cars are green, yellow or red dependig on debt level.
Good thing we'll be chemtrailed into stupidity before the global plantation endgame with a capital in Jerusalem becomes reality:
http://timesofindia.indiatimes.com/home/science/Virus-that-makes-humans-...
The future of society is already sunk. The Banksters and Politicians have had over 100 years since the inception of the Federal Reserve to prove they are responsible enough to provide a productive and lucrative economic climate for the American citizen. Therefore, either end the Fed charter and the complete central planning model or start helicopter dropping shitloads of 1's and 0's into the banking accounts of every American citizen; and corporations are not people this time around. After all it's already on our fucking tab.....
They were looking for a somewhat elastic money supply. I don't think this lean mean printing machine was what they had in mind.
Elastic money supply, is that anything like a rubber check?
I think this article is very unfair in the historic context.
If you go back in History :
-- The Druids were supposed to perform miracles to save the tribe. Merlin and Excalibur.
-- The Popes were supposed to create a miracle to keep the Barbarian at the gates : think Pope Leo 1 and Attila, Saint Genvieve and same.
-- After battle of Waterloo the first Rothschild created a miracle for Britannica by becoming its first money changer and prime banker.
SO, IN THAT august tradition why shouldn't the FED be the savior of Empire and Pax Americana's global reach thanks to King $, its very OWN baby ?
After all, it is OUR BABY, not Rosemary's, whatever you may say! This is not a test tube baby, we created it with JP and Rockafella and Woodrow as our three MAGI, wise men and Godfathers, who anointed its birth at Jekyll Island.
Now that we have had 80 years of "you've never had it sooooo gooood", you guys are bitching about our Hercules, saying he has CLAY feet.
Poppycock ! It ain't the Hindenberg. It'll fly and fly and fly. No way its gonna come down.
Red Baron or no Red Baron; Hun or Mongol or Ruski, we fear no one !
Carry on King of the wild frontier!
Keep teasing us. Bomb Iran, the last BIS (Bank of International Settlements) infrastructure element. Go ahead big boy, watch the wealth move into a new monetary venue. You will lose the monopoly battle.
Ask BIBI to strike down on IRAN. ASAP. ZIONIST cunts will never learn.
You may have already covered this and I missed it but what about Goldman's new tool, Kensho. CNBC will run questions and give us general answers it appears and the Kensho box will be part of their show.
http://ducknetweb.blogspot.com/2014/11/goldman-sachs-big-investor-in-kensho.html
My question is, what proprietary version does Goldman's clients get? What areas will be searched for them that could outside the public view for stats and numbers? They're playing with some new algos with speech recognition now. It's like a Siri for client evaluations and analytics?
Being a data person, oh, there's all kinds of places Goldman can go with this one and you have tons of parameters to program and as I read it will respond with numbers specific to your type of profile, i.e. are you a Bull or a Bear for a real simple analogy..of course it will be more specific than that so two people asking the same question will get different results...and in the meantime...Fidelity and Stock City...see your portfolio with gamification! Visuals to say they help you understand your portfolio and play this little visual game that might in fact be so captivated with graphics that investors mess up, and I think that's what Fidelity might be banking on...I put that in the link above too...
One thing though that real quants can do that Kensho won't be able to advise on and that would be insider trading...the illegal kind (grin). I just see some of this as more ways to hide corruption with some proprietary code.
Oh, the poor mistreated banksters. My earnings go out to them.
Well, at least there is a Martin Armstrong movie called "The Forecaster" coming out soon........
https://www.youtube.com/watch?v=yRLA05MFMYY
http://filmperspektive.de/en/films/the-forecaster
So, why isn't he richer than Mr. Dimon or some of the other Big Boys if his forecasts are so good?
The only thing the banksters fear is a large number of people who are, at present, asleep finally hearing the alarm clock ringing, and not hitting the MSM snooze button.
what drives central banks....6 figure speaking fee from criminal banks!
Dance Monkeys, Dance!
Ennh- I think Greenspan was mostly a patsy- a guy who once told Barbara Walters to not buy an apartment in the village for under 50K, really a guy who doesn't have the financial acumen to be in a place but was told he was a wizard, because it served the people who were already in charge of the money.
The reason the QE doesn't work is it is really no better than welfare for people who have money. You put the same level of money into infrastructure, and better yet, technologies, and they'll be something to crow about. It is technology that is the driver of economies of scale, nothing more, nothing less.
I'm waiting for someone to say, Government can't fund innovation. Well, Al Gore invented the internet, and despite the name the Manhattan project was a Washington project.
“A central bank was (and still is officially) supposed to be independent of politics”.
How can you write that?
An early declaration that pertained to central banks is found in the Communist Manifesto; one of its planks calls for the centralization of all credit into the hands of the state.
Perhaps this is why Lenin wrote that one of the first actions necessary to establish a collectivist state is the institution of a central bank. And, by “collectivist” I mean any form of tyranny; whether, feudalist, socialist, fascist, nanny state, monarchist et cetera.
Nice avatar, baby.
Yellen's going to raise rates? Huh?