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View Full Version : The Folly Of The Central Banks Of Europe



mick silver
30th October 2008, 12:44
The current financial crisis will probably lead to a deep recession. This article suggests that European central banks, misguided by outdated econometric models, should have cut rates faster and deeper in a coordinated fashion. They should now scrap these models and agree on a large, coordinated cut of 2%.

A convincing argument for independent central banks adopting an inflation targeting framework is that, where central banks are forward looking and responsive, they should be able to avoid deflationary slumps. The markets then should expect the central banks to assess clearly the global economic situation and the downside risks, and take decisive action. Instead, it was the European finance ministries, via the bank refinancing packages announced between October 8th and 14th, that demonstrated their far greater understanding of the risks involved. They acted in a timely and potentially effective internationally co-ordinated manner. It was less effective because the central banks failed to follow up their initial too small interest rate cut. They were persuaded into a co-ordinated half point interest rate cut on October 8th, with the Bank of England, it is rumoured, a late and hesitant participant. The central banks then sat on their hands, despite a daily barrage of deflationary news.

http://www.resourceinvestor.com/pebble.asp?relid=47507

Kelly
30th October 2008, 13:08
The one thing that strikes me most about this article is that the author seems to be missing the most obvious play. It's the EU and the ECB bankers who are being the most vocal about supporting the idea of a new "Global Monetary Authority." Whatever the PTB decides, the worlds' reserve currency is either going to be the Euro or something like it. If the plan is actually "something like it" then the ECB has to make moves that will bring the folks in the European Union clamoring for change, just like the Fed is making moves that will make Americans clamor for change.

Nothing the banks are doing on either side of the ocean is necessarily a "mistake." It's part of a greater plan to bring on the NWO. The ECB bankers don't care any more than the Fed bankers do who gets hurt in the shuffle. They are simply bankers and to them, the end result will always justify the means.

Kelly
30th October 2008, 13:50
John Muellbauer ends his article saying, "They now have a last chance to undo the damage of last week. They need to put aside short-term currency wobbles, focus on the big picture and surprise the markets with a much larger cut, probably of 2%. If international co-ordination is now harder to achieve, then leadership by the ECB and the Bank of England will have to suffice."

One really has to wonder if the author even has a clue as to the history behind the ECB, the Bank of England and the Fed. Their origins are precisely the same. What the ECB and the Fed wants to do is precisely the same and they each have to work to collapse the present economic system in order to get to where they want to go. The author is assuming the ECB has made a "mistake" that will lead to further unwanted economic turmoil in the European Union. Frankly, it's not very likely that was a "mistake" in their eyes.

Jeeze, all you've got to do is listen to Gordon Brown and Sarkozy. It's pretty clear where they want to go.

http://www.redicecreations.com/specialreports/2005/08aug/redshield.html

prahudka
30th October 2008, 16:02
The one thing that strikes me most about this article is that the author seems to be missing the most obvious play. It's the EU and the ECB bankers who are being the most vocal about supporting the idea of a new "Global Monetary Authority." Whatever the PTB decides, the worlds' reserve currency is either going to be the Euro or something like it. If the plan is actually "something like it" then the ECB has to make moves that will bring the folks in the European Union clamoring for change, just like the Fed is making moves that will make Americans clamor for change.

Nothing the banks are doing on either side of the ocean is necessarily a "mistake." It's part of a greater plan to bring on the NWO. The ECB bankers don't care any more than the Fed bankers do who gets hurt in the shuffle. They are simply bankers and to them, the end result will always justify the means.

Which means, they will need consensus on the new currency. If there is competition, the efforts for a new fiat will fail.

Doesnt that also sound like a system that cant tolerate the competition of real PM coins?

Kelly
30th October 2008, 16:10
Doesnt that also sound like a system that cant tolerate the competition of real PM coins?


Yep, it sure does. Which is why, I suspect, gold and silver is just as hard to find, if not harder, throughout Europe and Australia as it is in the USA.

research24
30th October 2008, 16:22
I don't get the feeling that anyone is going to agree on anything. This is a financial collapse and currency crisis in the making, and history tells us these things play out over a fairly long time, like 4-5 years before the final implosion. The big boys know that and won't likely be in a hurry to try to change anything because they can't. You got politicos calling for a Bretton Woods III and others laughing at them.

China, Japan with the largest dollar reserves must be angling for a way to get out of this without loosing their shirts. They are all in a box, and no matter what they do the result is bad. Plus, they all have different motivations, so I see this whole situation playing out with the usual blizzard of bandages but no real agreement on anything until the US collapses under a mountain of debt.

Kelly
30th October 2008, 16:37
I see this whole situation playing out with the usual blizzard of bandages but no real agreement on anything until the US collapses under a mountain of debt.

If you've been paying attention to the news, those calling for a new Bretton Woods, with Godon Brown of the UK and France's Sarcozy leading the pack, don't seem to necessarily care whether a consensus is reached or not. It would appear they are going to do what they are going to do, and anybody who doesn't go along with it, including the USA, will simply be blackballed from financially trading through or participating with "the new global monetary authority." There is a very definate push to tie the European Union, Russia and China all on the same side, and presumably as many other Asian countries as they can. The hit I am getting is that the US will be officially ostricized and will either enter into whatever agreement is made from a very reduced position and very little authority, or not at all.

research24
30th October 2008, 16:57
I seriously doubt that the asian tigers will go along with that, unless you can think of a way they can get out from under $3 trillion in cash and bonds. Gordon Brown is allowed to speak only out of politeness as his banks are bust and his pound is anything but sterling. As for Sarkozy, the Chinese are anything but fond of Europeans. No, I think I see Asia sitting back and watching the west self destruct without their help. Only America did not attempt to colonize China and those folks have long memories. After all, why assist your enemy when he is killing himself?

Do you forsee Europe forcing its shaky currency on Asia with Asian capitulation?

skijake
30th October 2008, 17:12
If you've been paying attention to the news, those calling for a new Bretton Woods, with Godon Brown of the UK and France's Sarcozy leading the pack, don't seem to necessarily care whether a consensus is reached or not. It would appear they are going to do what they are going to do, and anybody who doesn't go along with it, including the USA, will simply be blackballed from financially trading through or participating with "the new global monetary authority." There is a very definate push to tie the European Union, Russia and China all on the same side, and presumably as many other Asian countries as they can. The hit I am getting is that the US will be officially ostricized and will either enter into whatever agreement is made from a very reduced position and very little authority, or not at all.

Finally , we can just got our own house in order without all the complaining. Kick the UN out to start. Stop trying to police and save the world. No money for that anyway. We will get rid of most of our lawyers and lousy legislators. After a decade of belt tightening and working out we will be the envy of the world {again}. By then with the UN in Africa and our lawyers in China once again everyone will be trying to get us into their mess. Sorry, not this time! To busy making sure we don't fall on our face again. ISOLATIONISM at it's finest. When do the fireworks start?:rolleyes:

Kelly
30th October 2008, 17:18
Only America did not attempt to colonize China and those folks have long memories. After all, why assist your enemy when he is killing himself?


One word; exports.

The NAU is dead. The whole thing was put into play for China's benefit. Without that, exporting anything to America from Asia will be increasingly expensive as oil prices rise and only result in more useless American dollars in Asian hands. They don't want that. Tension between the US and China is very high right now. China is openly pissed at the US. Congress is increasingly trying to get anti-China legislation passed through congress; partly to encourage American manufacturing again, and partly because the Chinese products haven't proven to be very safe and American consumers are griping like crazy about it.

If China and the rest of Asia want to continue exporting anything, continued exports to Europe, makes more sense. Whether the New Bretton Woods decides to make the Euro the worlds' reserve currency, or will perhaps create a new currency that isn't necessarily pegged to any one nation is anybody's guess. Never-the-less, whatever happens, Russia, Europe and China appear to be forming an alliance. And whatever China decides to do, I suspect the rest of Asia and India will follow suit.

Kelly
30th October 2008, 17:24
Finally , we can just got our own house in order without all the complaining. Kick the UN out to start. Stop trying to police and save the world. No money for that anyway. We will get rid of most of our lawyers and lousy legislators. After a decade of belt tightening and working out we will be the envy of the world {again}. By then with the UN in Africa and our lawyers in China once again everyone will be trying to get us into their mess. Sorry, not this time! To busy making sure we don't fall on our face again. ISOLATIONISM at it's finest. When do the fireworks start?

Yeah. That's the way I see it too. I hope we turn our backs completely on Bretton Woods and decide to just figure out how to take care of ourselves for a change. I don't think world trade has necessarily proven to be very beneficial for the American people, and it won't be until we are in a position again where we can balance the trade deficit.

research24
30th October 2008, 18:21
I don't think world trade has necessarily proven to be very beneficial for the American people, and it won't be until we are in a position again where we can balance the trade deficit.

Now there's an understatement ever I heard one. FAIR trade, not free trade.

skijake
30th October 2008, 18:29
Yeah. That's the way I see it too. I hope we turn our backs completely on Bretton Woods and decide to just figure out how to take care of ourselves for a change. I don't think world trade has necessarily proven to be very beneficial for the American people, and it won't be until we are in a position again where we can balance the trade deficit.

Awesome, that's 2 of us. We don't get credit when we do things good so lets concentrate on doing good here. Lord knows we have a hill to climb.