I think that in financial markets and in the press the degrees of freedom that central bank officials enjoy are vastly overestimated. I consider central bankers to be captives of three overwhelming forces...
St. Louis Fed President James Bullard tells CNBC that his "main message" for viewers is that the Fed's policy is "very easy and it's going to stay easy for a long time."
These deposits aren't about people taking cash out of mattresses depositing it in the banks. This story should not be about the banks not lending, because its not true. They are.
The market took comments regarding QE in a negative light and sold off sharply after hitting cycle highs yesterday. The S&P 500 traded off by 1.25% and the Dow was lower by 0.77%. Six of the ten S&P sectors sold off by more than 1% today.
Of Interest and the Dangerous Habit of Suppressing It
The idea that the charging of interest is unethical and should be banned has a long tradition in the history of human civilization. It seems to have played a role at some point in all the major religions, certainly in Christianity, Judaism and Islam, and it is today promoted most strongly by advocates of Islamic banking.
The evidence of a major breakdown in global economic and monetary cooperation continues to mount. Just yesterday, the G7 released a statement regarding foreign exchange policies, only to be followed by a corrective statement that the market reaction was undesirable.
Perhaps the single greatest danger facing investors over the long term is to be investing for the wrong paradigm. That may sound a little theoretical, but we have a very clear and quite dangerous real-world example going on in front of us right now, which is the false dichotomy between the "Mainstream" and the "Gloom & Doomers".
Every politician in America knows that Social Security (SS) is a third rail. Any Pol who tries to mess with the country’s largest and most popular entitlement program is going to have the likes of the AARP coming after them. It’s not possible to win an election on a platform that advocates cutting back SS.