No FED Bets From the BIS
by: Jeffery Lewis, March 31, 2015
It is becoming harder and harder to ignore the fact that central banking policy isn’t exactly working out for the real economy. More wealth has been funneled toward an increasingly small and concentrated pool of unproductive paper wealth.
But low and behold, it looks like the political-monetary landscape is being groomed in preparation for the next leg of this ongoing train wreck. Now the Bank for International Settlement (BIS), the central bank bank of central banks, is throwing the Fed under the bus.
This is from the central bank of central banks:
Here’s an excerpt The BIS Quarterly Review for March 2015:
As discussed in detail elsewhere, there is a case that policy should first and foremost constrain the build-up of financial booms – especially in the form of strong joint credit and property price increases – as these are the main cause of the subsequent bust.
They are telling us this now?
And once the financial bust occurs, after the financial system is stabilized, the priority should be to address the nexus of debt and poor asset quality head-on, rather than relying on overly aggressive and prolonged macroeconomic accommodation through traditional policies.
That certainly sounds a bit critical.
This would pave the way for a sustainable recovery.
I thought recovery was behind us. Or is this a premonition?
The idea would have to be macroeconomic policies that are more symmetrical across financial booms and busts so as to avoid a persistent bias that could, over time, entrench instability and chronic economic weakness as well as exhaust the policy room for maneuver.
What they mean by asymmetry and persistent bias is the massive concentration of wealth (the bias) tied to an impossibly small pool of real assets, from real estate to commodities, to productive enterprise and precious metals – the asymmetry is inherent in these Ponzis.
Here is one very interesting footprint beginning to form as the smoke clears and the Fed reverses its position.
21 countries that have cut interest rates in just the first 2 months of 2015:
For those asking, here is the full, updated list of 20 central banks easing so far in 2015 courtesy of Reuters:
For Source and list click here: