Wednesday, October 12, 2011

A Thought on Central Bankers

Central bankers are not to be listened to. Simply ignore everything these folks say. They are in total denial when problems are at their door, only to acknowledge the problem when they are on their way out or have left.

Greenspan used his "greenspeak" alien language to wow the markets with his genius incomprehensible guidance in the middle of a boom, only to speak clearly after he left and say that "he had no idea how bad the housing and mortgage problems were" during his tenure. Glorious Fed Chairman could not see the simple fact that banks are overleveraged and undercapitalized?

Trichet today and yesterday, all of a sudden, has awakened and is saying that "systemic crisis has reached catastrophic proportions", and that "EFSF has to be leveraged". This is all new to him just 18 days prior to his term expiring. Raising rates should have helped the systemic crisis prevention, right?

Bernanke is the most famous of them all. I do not want to repeat myself over and over, you know what I think. "No subprime spillover to prime, no prime spillover to economy, all is contained", then $ Trillions in QE, and after that no rate hike for 2 years, etc, etc. This hero has some battles to fight still, a long time left for him to mess up further, and believe me - he will.

Can we please find someone else to drive the bus already?? Arming these folks with such a concentrated power of juggling too many balls at a time, has produced the outcome we are all suffering from now. While they were too busy fiddling around with impossible to alter boom and bust cycles of economy, they forgot the simple act of regulating the banks - their main responsibility. Having them fall asleep at the switch, and now bailing out everything in sight is what this world will have to deal with for perhaps another decade.

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