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BIS Slams The Fed: The Solution To Bubbles Is Not More Bubbles, It Is Avoiding Bubbles In The First Place
On one hand there are hard-core Keynesians who will wave the flag of inflation as the only cure to a world drowning in debt, even after the mushroom cloud results of their policies going off around the globe "assure" GDP hits +? once every window in the world is shattered and has to be replaced...
... on the other, you have the BIS which with every passing day is becoming the citadel of Austrian thought, the latest example thanks to the BIS' most recent quarterly review in which we read that not only is deflation not the "monster" the Bank of Japan and other Keynesian acolytes would like to make it appear...
The evidence from our long historical data set sheds new light on the costs of deflations. It raises questions about the prevailing view that goods and services price deflations, even if persistent, are always pernicious. It suggests that asset price deflations, and particularly house price deflations in the postwar era, have been more damaging. And it cautions against presuming that the interaction between debt and goods and services price deflation, as opposed to debt’s interaction with property price deflations, has played a significant role in past episodes of economic weakness.
... but more importantly and as Zero Hedge has said from day one, the BIS now says the solution to an asset bubble is not some incomprehensible jibberish of "macroprudential regulation" or a "bubble-busting" SWAT team at the Fed, not another asset bubble (especially not one which leads to house price deflation, the same that is slamming the Chinese economy at this moment), which by now has become clear to all is the only "tool" in a central banker's aresnal, and the remedy to debt is not even more debt.
How best to address financial cycles is a broader policy question that the specific analysis in this article obviously cannot answer. As discussed in detail elsewhere (see eg Borio (2014a,b)), there is a case that policy should first and foremost constrain the build-up of financial booms – especially in the form of strong joint credit and property price increases – as these are the main cause of the subsequent bust. And once the financial bust occurs, after the financial system is stabilised, the priority should be to address the nexus of debt and poor asset quality head-on, rather than relying on overly aggressive and prolonged macroeconomic accommodation through traditional policies. This would pave the way for a sustainable recovery. The idea would be to have macroeconomic policies that are more symmetrical across financial booms and busts so as to avoid a persistent bias that could, over time, entrench instability and chronic economic weakness as well as exhaust the policy room for manoeuvre.
The Fed's response: the S&P should hit new all time highs in the next few hours.
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Those posters of Krugman make some mighty fine targets at the range.
Then why was the BIS involved in coordinating the rigging of gold while loose monetary policy was run for decades?
How are you going to bail out the system with gold if its already fairly valued ?
You cannot possibly know if anything is fairly valued, let alone Gold, in these manipulated market
Moar bubbles!
- Dr PK
Behold the sage and wise Board of Directors of the BIS. Bastions of sound money policy and keepers of economic flame.
The BIS Board of Directors
Chairman: Christian Noyer, Paris
Mark Carney, London
Agustín Carstens, Mexico City
Jon Cunliffe, London
Andreas Dombret, Frankfurt am Main
Mario Draghi, Frankfurt am Main
William C Dudley, New York
Stefan Ingves, Stockholm
Thomas Jordan, Zurich
Klaas Knot, Amsterdam
Haruhiko Kuroda, Tokyo
Anne Le Lorier, Paris
Fabio Panetta, Rome
Stephen S Poloz, Ottawa
Raghuram Rajan, Mumbai
Jan Smets, Brussels
Alexandre A Tombini, Brasília
Ignazio Visco, Rome
Jens Weidmann, Frankfurt am Main
Janet L Yellen, Washington
Zhou Xiaochuan, Beijing
All just front men. No real "owners" there.
Correct, front men is all we see. The same owners of the FED are owners of the BIS.
http://www.amazon.com/Tower-Basel-Shadowy-History-Secret/dp/1610393813
they are moving us rapidly to their plan imf sdr. I dont want it
Yes, the BIS must distance themselves and blame the very banks that they directed to destroy us. How else will we accept them as the solution to failed central banks? The new narrative from the BIS will be, "Gosh! Look! Those countries can't manage their finances! See! We told you! Time for a new world bank with a one word currency! And we'll run it because we knew you were fucking up."
I'm sure that every last one of them is doing his best to look out for the interests of the little guy!
;-)
Seems like I cant even read this shit anymore its the same story written over and over and untill it is turned upside rite well nothing will change BIS is BULLSHIT period same story different day diferent week diff year so when damitt
bis is another crony scam(skimming) no different than the fed. musical chairs amoungst the two bodies of criminals. their all in the same bed, but fucking all us instead of each other...
That imbecile has been a major force in putting the world in the shitter.
Bet he gets another Nobel prize - he is that f*cking bad he deserves two.
The Nobel Committee and central banks are both getting pretty successfully debunked this century, and the century is still young. BIS is trying to find some way to slime onto the winning side. They are now KNOWN, and their mystique is all but vanished. They may not disappear, but they are known and can more easily be watched.
As horrific and depressing as it all seems today, I'm still liking this century a lot better than the last one. So far, even if it is by discovering their dismal results, we are falling less in love with lies.
Discovering and getting used to the idea that there is no Santa Claus, to me is worth all the fear and sorrow. From truth will come justice.
Very well put. I'm going to have to agree, but I hope more people start seeing past the bull shit.
From truth will come justice.
And with truth will come a thorough wiping of the zionists.
Americans are waking up by the thousands each day. Don't seem like much? It is. People talk.
"Those posters of Krugman make some mighty fine targets at the range."
I was thinking about using smaller versions of them when it´s time for the next session on the throne. Might be a bit rough, but it will be satisfying.
Watta novel Idea.......and coming from the BIS no less. Now back to American Idol and the Voice... much better theater
Exactly. BIS (Pot) meet FED (kettle).
Is this supposed to be serious or just moar <sarc>?
More like a seriously weak attempt of some CYA. The end must be nigh, and the rats want off the boat.
"The Solution To Bubbles Is Not More Bubbles, It Is Avoiding Bubbles In The First Place"
The title is 100% true!!!!!!! The title is an axiom that would allow the greatest amount of wealth in as many hands as possible.
The irony is that without bubbles Zero Hedge would not exists!
There is the conundrum.
If none of this madness took place, most likely ALL of us here would be much better off, as well as most of the world.
Cannot junk you, but I have a lot of doubts that this is true. Say global debt hadn't exploded 57T since 2008. Debt-free wealth creation hasn't been a part of the menu for decades, why do you think it would start now?
Sorry, double post -- carry on, Paul!
BAD puppet! VERY, VERY BAD PUPPET! Now, go to the corner and milk a few more billions from the unsuspecting, lazy "investors". Don't forget imposing capital controls so you can corrale what's left of their filthy lucre. And, for __'s sake, STAY BENEATH THEIR RADAR!!!!
The biggest fattest black swan in the world is called leveraged asset deflation. Nothing they do now can keep it from landing....probably sooner than later.
So why is the BIS suppressing the price of gold? Wouldn't a rise in gold prices impose discipline on money printers?
You just answered your own question.
In all honesty Krugman did say that wars were NOT good for the economy. Hate to defend this douchebag but it is what it is.
6 YEARS TOO LATE
I got one. It's real simple and done without electric, printers and you don't even have to pay a banker.
STOP PRINTING MONEY ON THE BACK FOR FUTURE GENERATIONS
The bankers couldn't manage their debts in 2008, they had a debt jubilee with unconditional bailouts.
Use 2008 techniques for a global debt jubilee.
Get Central Banks to purchase all loans for face value and just hide them on Central Bank balance sheets until the loans expire
All the money required can just be created out of nothing in the usual Central Bank manner.
If bankers, the purveyors of debt and whose business is debt, can't mange their own debt it is time for a global debt jubilee.
The global economy will recover in no time.
"OK - we'll bail you losers out this time, like we did lots of times before, but we definitely won't do it again. Definitely. Probably. Unless it was politically difficult, but we'd definitely try very hard not to bail you out. Fairly hard anyway. I expect.
"So don't get your organisations into ridiculous levels of debt to your own personal benefit again. Consider yourselves warned."
Can we also slaughter the usurers in addition to debt jubilee? Oh my how badly I want to taste the iron in their blood.
BIS criticizes Central Bank behaviour but its directors are the Central Bankers.
Can anyone make any sense of this?
Inverse Stockholm syndrome.
It's just so that they can say after the fact "but we warned you". Bunch of hypocrites IMHO, they supported this bubble blowing for long enough knowing exactly it did not fix anything. Now that even the half brain-dead start realizing it's not working, they come out of the woodshed... LAME.
The janitor typed and issued after all had gone home for the weekend is my only answer.
Yes. The BIS must distance themselves from the very system they direct from behind the scenes. After the world collapse they will blame the central banks and point to their comments on how they knew the banks were making a mistake. This way, they position themselves as the new word bank. Or at least survive until they try to roll out the one world currency. Which is being thwarted right now by the BRICS.
The FED gets its orders from the BIS, Just another bullshit article that should not be on ZH.
Ahh, The Rats are jumping ship I see.
The Fed governors are paid not to see bubbles until the "Friends of the Fed" or FOFs accumulate their ill-gotten gains, after which the Fed governors are paid to scare Congress into bailing out the FOFs. Lather, rinse, repeat.
TL;DR we're all in this together...well, "us" meaning "us," not necessarily you.
<<< inflate away (more debt)
<<< die (utter collapse)
These are the choices... no wonder they try to go for a) though at some point b) becomes inevitable, and we're getting closer and closer now to the end of this game.
The BIS is ground zero for this entire criminal gangbangkster network.
Here comes the BIS, let's just cut the "I" and see what they really are :-)
and where, I might add.
Ditto
And once the financial bust occurs, after the financial system is stabilised, the priority should be to address the nexus of debt and poor asset quality head-on
Surely the financial system should be stabilised by addressing the nexus of debt and poor asset quality head-on i.e. by forcing the insolvent through bankruptcy and recovering what can be recovered for the creditors. "Stabilising" the system first forces the losses onto the wrong people.
Have the author's of said BIS paper spent one day, ONE DAY, in the (so-called) private sector? No?
Next.
Market thoughts:
http://thetradingcrucible.blogspot.com/
Bubble me this...--The Swindler Laureate
Zion's central bank bad mouthing the FedRes?!
More proof for those that see, that Zion is paving the way for the dollar collapse.
Raise the dollar artificially making it cheaper to move assets overseas to mostly Europe. Have the FedRes continue propping up the markets while the connected and Amongst leave. Bad mouth the fall guy FedRes so the sheeple look no further than them when the time comes. Prepare the SDR substitute for the dollar--can't let those dollar debts evaporate into inflation can they? Pull the plug on oil prices to allow your Middle-East partners to change out their assets while they target Russia. The same low oil prices also allow one to take control of American heartland oil assets via debt defaults.
For those the don't see, you better look a little closer at Obama's background and real actions since becoming Zion's head puppet of their DC US war dog.
The banksters need to repay us.
If one goes to a right-wing site, they will find accusations that the media is controlled by the left. If one goes to a left-wing site, they will find accusations that the media is controlled by the right. If one were to think about it a bit, they would realize that they are BOTH correct.
ALL THE CFOs ARE KIKES. DUH
Krugman is an imbicile! So are all who drive the Fed!! End the Fed ASAP!! We don't have the time to waste~!
Fuck Krugman.
Triple fuck him.
Fuck Krugman.
"Poor asset quality" equals higher yields. Gotta chase it, right? Can ALWAYS sell it to the next sucker, I'm sure.
OK, not really. You are stuck with total shit as the fine folks you bought from lied about the whole structure. Your tough luck.
J. Dimon tried to back out of an insurance pay off but it was too late, the funds were transferred. His opposite told him to fuck off. This was early on...
BS from the BIS to distance itself from the Fed in case things get ugly and the Fed gets blamed. The BIS will welcome the panicked and pissed US sheople with open arms into a new and improved global currency and monetary system.
Hegelian dialectic at its finest.
Fuck all bankers especially the New World Order, Global Government ones like the BIS.
Conspiracy Theory of mine here:
It sounds like a speech Janet Yellen could have written.
"The evidence from our long historical data set sheds new light on the costs of deflations. It raises questions about the prevailing view that goods and services price deflations, even if persistent, are always pernicious. It suggests that asset price deflations, and particularly house price deflations in the postwar era, have been more damaging. And it cautions against presuming that the interaction between debt and goods and services price deflation, as opposed to debt’s interaction with property price deflations, has played a significant role in past episodes of economic weakness."
WTF. All of the sudden the data is speaking to some banking group? Why? Why is it obvious now? Perhaps it is just an act of mercy? Perhaps the admission is to head off Social Strife, Social Activism, Protests, Social Unrest??
SO 2015, end of 2nd FISCAL Year in Europe, what?
All of a sudden, Antisemitism is on the Rise, Possibility of a New Cold War Rises, War in Ukraine seems outlined, Middle East Chaos is broadly obvious, Religious Insurgent Wars in Europe are Confirmed, ... no one has any idea what Covert Spy Agencies from any US, Canada, Australia, Britain, NATO, or Israel ARE doing other than Financial Monitoring and Working out of Military Hubs all over the world to control Sea, Air, Land, and Space Domains.
Maybe the BIS Confession is in response to Social Pressures and a Yearning to Save Europe from a New World War (European War).
The Elites in Europe are happy to profit and take tax breaks. They are happy to stand on the sidelines for Iraqi and Afghanistan wars... and so the war in Syria and Libya are sidelines.
Europe has been Silent.
Europe has not Protested against the Sidelining of the Geneva Conventions. Guilty.
To be in NATO is to be Guilty of War Crimes in the Iraqi and Afghanistan Wars.
Now...
- wow Europea, BIS, wants to distance itself from the USA...
- wow Europea wants to distance itself from US Financial Instruments,
- wow BIS now wants Stability all of the sudden after war, over turning of the Geneva Conventions, Dirty War in the South West Asian Vacation/TDY for the US Military
- Wow I guess the Threat to Jews could also be a big pressure... a Strategy of Tension/Friction in Europe... which would benefit the Right Wing, the Jewish Community, Conservatives in the USA, and the Migration to Israel.
So, the Rise of the Caliphate benefits migration to Israel and the money transfers from Europe to Israel.
Lots of people benefit from the movement, Diaspora, of peoples from Europe, just like in Early 20th Century like Einstein, and others as a result of the rise of the Nazis and their Ambitions.
One could present a perverted strategy from 1910 - 1947 to get Intelligentsia to Migrate from Europe to the USA.
History Repeats itself, but not always from the same enemies OR with the same targets or Victims.
Today maybe with US Militant Forces, there are also those that Strengthen Israel with Funding and Political Power in the USA, We have huge Funding in the USA for Israeli Issues, Protection, and War...
Today we have huge Militant Forces to Lobby for MIC, to Lobby for War, To Place Politicians in US Congress & Senate, To Demand Strength for US Military, To Demand Strength for US DOD Military Industry, To Demand Higher Compensation for Military or Contractor Compensation and Contracts...
But NO one cares about the Conflict of Interests, the Financial Conflict of Interests, the Lobbying, the Gift Giving, and the Favors.
No one cares about the Domination of the US Congress Men with Money.
No ones cares if different Categories of Weapons are dominated by 3-6 Different Contractors in the MIC.
We suspect the conflicts of Interest in the USA for a World War are huge.
But it is clear the USA can't sustain a world War.
The USA would clearly collapse it's currency, it's federal government, it's central band, it's stock market, and it's bond market.
- Teeth's National Security Assessment of Preparedness for a World War (A work in Progress)
-----------------------------------------
- Teeth's National Security Assessment -
-----------------------------------------
1. Augustine's Laws prove Weapons are becoming too expensive and at times too Complicated for any force of a million or more men and women to use
2) War the size of Iraqi War has far higher costs then authorities will admit, being much smaller than a world war, $3 Trillion USD is the Entry level for a Regional War over 700 Miles from CONUS
3) A National Draft would be needed for the USA, since it really can only field 400K-500K, however the shock to the US Economy and People would be Great
4) US would have to Nationalize Defense Corporations and maybe Private US Military/Armies to protect the USD, and prevent Catastrophic Economic Collapse & Federal Government Collapse by War's End
5) World War Sized Conflict would require US Field Forces who could Seize Assets or Pirate Assets from other Countries or Corporations, and perhaps would rely on Slave Labor for some Tasks or Functions of War or for Food and other materials required by a nation at war
6) Commodities have far Too Low Availability & are Too Subject to Price Increases for the USA to Wage a World War
7) National Stock Piles are too Low to sustain a World War
8) US Would have to Nationalize an Ability to Produce Food, Grain, Electricity, Transportation like Trucking, and Oil, Gasoline, Diesel, and Chemicals... This could mean Nationalizing Whole Industries to keep costs and prices within a Reasonable Range and not bankrupt or break the Federal Government
9) Privateers and Federal Contractors would still become wealthy much like the Rockefellers, Carnegies, Warburgs, Rothschilds
10) Cost of US Defense Contractors and US Military has been known to be Excessive since the Vietnam War, the War Profiteers have done a great job of Mind Control in Covering this up, agitating Washington DC, and using the Cold War to get Wealthy, this is the biggest national security threat to the USA
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- Teeth's National Security Assessment -
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And the winner of the gold medal for deflective blame and finger pointing is......
USA to be sacrified , thank you, that is all.
The BIS is the King of Kings of Fraud.
The Fed is the American King of Fraud.
There is a hidden agenda when the King of Kings of Fraud engages in any criticisms of the previously most dominant national King of Fraud. There are phases of deterioration towards NeoFeudalism, (although that deterioration will NOT stop there.) The biggest banks have become the new royalty, which became "too big to fail" and "too big to jail."
The Federal Reserve Board was the single greatest national King of Fraud. However, it was always less than the BIS, because the international banksters were always bigger than America, and so, the BIS is the King of Kings of Fraud.
Since there have relatively recently developed globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs, the history of who originally made and maintained the established financial systems has become like archeology, which may assist with understanding the absurdities that exist today, but does NOT actually assist with understanding the future of those systems.
But nevertheless, I repeat Carrol Quigley quotes:
http://quotes.liberty-tree.ca/quotes_by/carroll+quigley
http://www.archive.org/stream/TragedyAndHope_501/CarrollQuigley-TragedyA...
"The powers of financial capitalism had [a] far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world. ... It must not be felt that these heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather, they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks."
Money is measurement backed by murder. There are no genuine solutions to the problems within the political economy that can work without placing that inside of the context of its environmental ecology. However, since the history of Neolithic Civilization has been based on more and more sophisticated systems of legalized lies, backed by legalized violence (which is what the central banking systems ARE), the world is now almost totally dominated by the best available professional liars and immaculate hypocrites, which also includes the BIS, perhaps more than any other group. The history of successfully enforcing frauds has made civilization become runaway criminal insanities. The real world has almost nothing but organized crime surrounded by controlled opposition groups.
Being able to make the public "money" supply out of nothing as debts, which frauds are enforced by governments, were the SOURCES of economic bubbles, since those with the privilege of legally counterfeiting the public "money" supply find every possible excuse to excessively do that, over and over and over again, while they get wealthier and more politically powerful throughout each twist of those spirals. The social successes of those systems have resulted in almost everyone deliberately ignoring the most important facts, in proportion to how personally successful they were from taking for granted, and operating inside, the established systems of ENFORCED FRAUDS.
While the Federal Reserve Board may have its days numbered as the dominant National King of Frauds, the overall globalized systems are presided over by the BIS, which continues to be the organization acting as the King of Kings of Frauds, as another front for the best organized gangs of criminals, which have captured control over the powers of governments.
By and large, the paradoxical ways that human beings MUST live as organized systems of lies, operating robberies, which have become more sophisticated government enforced frauds done by the international bankers, has resulted in hyper-complicated sets of contradictions, where those who were the best organized gangsters, the banksters, were able to apply the methods of organized crime through the political processes, to the degree that everyone else, somewhat proportionally to how socially successful they have been inside of those fundamentally fraudulent financial accounting systems, continues to also want to present the problems with those systems in the most backward ways possible, and so, to also offer various sorts of superficial, bogus "solutions" which continue to deliberate ignore the basic problems, that human beings operate as entropic pumps of energy flows, which have deliberately developed the most backward ways possible to misunderstand what they are really doing.
Everyone has some power to rob, and power to kill to back up their power to rob. Governments have assembled and channeled those powers, while the bankers were the best organized groups that could covertly capture control over the powers of those governments. There appears to be an agenda of the people who controlled the people that controlled the government of the USA to destroy that democratic republic and its rule of law, one of which methods is to destroy the American dollar, even more than it has already been destroyed, at an exponentially accelerating rate for more than a Century. However, one should not believe that the BIS would provide anything else than more runaway criminal insanities, through the future forms of the international banksters' systems.
... At the same time, it barely matters whether or not the above view of history is correct, and can be proven to be correct, since the vast majority of Americans, as well as the rest of the world's population, to various degrees, have already become incompetent political idiots, or Zombie Sheeple, who have already been fleeced to exhaustion, while they were being set up to be slaughtered. The current trends of debt slavery systems, supervised by the BIS, generating debt insanity numbers, are headed towards provoking death insanities, that probably can not be effectively prevented nor prepared for.
Although there is plenty of well-documented evidence to demonstrate how the banksters have been able to control the world, creating monetary systems which have become like totally metastasized cancers, that are killing their host, most of the articles and comments published on Zero Hedge tend to grossly underestimate those problems, and so, continue to over-confidently propose possible "solutions," which tend to not be remotely close to being in the same ball park as those problems.
I REPEAT:
Money is measurement backed by murder, as the most abstract form of private property being claims backed by coercions. Social pyramid systems are based on being able to back up lies with violence, which are becoming extremely unbalanced dynamic equilibria between the different systems of organized lies operating robberies, due to degree to which progress in physical science and technology is being applied in ways where there has been NO matching progress in political science, as manifested by the ways that the international bankers were able to create the currently established systems which do that, which now have the Bank for International Settlements as their apex.
But to avoid bubbles you have to allow deflation and not stroke inflation as a matter of policy.
To do this you have to get rid of the Fed I am afraid.
But this is never going to happen the only good thing about bubbles is you know they are going to happen and if you can ID them and short them you will be richer than you already are from riding it to the top.
A time before barcodes in the grocery store I could budget the same for grocerys week after week month after month things we always the same affordable price. Not one person here can tell me for certain the price of any item from day to day.
I want to go back in time to the steady as she goes days so badly.
I think ending the FED is a giant step to that end.
Actually, the BIS is all for macroprudential regulation. You are confusing the term with macroeconmic accommodation. See: http://www.bis.org/publ/work496.pdf