Home > Miscellaneous Musings > Central bankers keep digging bigger Holes

Central bankers keep digging bigger Holes

As Liam Halligan rightly points out in the UK Daily Telegraph, central bankers have found themselves in a hole at Jackson Hole.  The question is whether they will keep digging bigger holes or whether they will stop.

It looks like they will keep digging, which Einstein defined as the defintion of madness.  Well, as has been said by others before, Helicopter Ben is the Mad Scientist of economics…

There is a stark lack of consensus, also, on whether monetary policy should be eased even more, given that official interest rates are already practically at zero. The only way decisively to ease further is to print yet more money – or its modern equivalent, issue more virtual cash.

Such policy differences have escalated in the past few weeks, both within central banks and between them. Important people are now starting to worry that the wildly expansionary fiscal and monetary policies which have been the Western world’s response to “sub-prime” aren’t working. If that’s the case, we have endured all the downside of such extreme measures – in terms of massive government debts, possible sovereign defaults and future inflation – and for what?

Categories: Miscellaneous Musings
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