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Tag Archives: BOJ

Modern central bankers have things upside down, This is why they fail

Money isn’t wealth. It measures wealth the way a ruler measures length, a clock measures time and a scale measures weight.

Boy is this true, but so many people, including the supposed shamans at the Fed  fail to grasp (or choose oddly to ignore) this basic concept. Dumping “money” into the economic system isn’t going to make the economy grow, it will only make the money currently in the system worth less.

It’s not quite that simple. But it’s nearly that simple.

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Central Bank Nastiness, Japan Swoons, Nikkei Down 6.4% Last Night

There is a chill moving through markets right now. The great central bank experiment of the last 5 years (the acute version) is misfiring again. As they say—you can’t get something for nothing, and the experiment which has failed the lower and middle classes of the Western world is now failing the monied classes. At least at this moment and in Japan. The markets which were feeling pretty good about themselves (for the most part, though Japan has had significant volatility recently) aren’t feeling so good.

The world is coming to terms with the possible end of QE, and like a heroin addict whose methadone prescription may soon run out, markets are getting very nervous.

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Bernanke’s Cures Are the Economy’s Disease

So the Fed is going to “taper” away the quantitative easing, the printing of money, in which it is currently engaged. Bernanke (or Larry Summers—shudder) will one day allow interest rates to rise back to normal levels. Don’t worry, the economy will emerge from this radical economic experiment and all will be well. You’ll see. Ben promises.

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