Headline from the Telegraph:
How central banks have lost control of the world
My latest blogpost: So, the Truth is Out - FinallyTweet this!
"lost control"? That implies they had it in the first place.
Yep When people dont want to borrow the CB cant make them.And when they do want to borrow the commercial banks have often found ways of satisfying that appetite in the past.
"Sweden... became the 14th central bank to ease monetary policy so far this year, but the first to actually take its "repo rate" below zero to -0.1pc." Well, the first apart from all the others of course. Like Denmark or Switzerland.More to the point, QE is money for nothing as far as the central bankers' chums in the commercial banks are concerned. This is what happens when They are 100% in control.(See also: revolving door).Trebles all round!
MW. Those countries have lowered deposit rates to negative levels but Sweden is the first to lower it's main repo rate. Sweden's central bank overnight deposit rates were already below zero.Central Banks are engaging in competitive devaluations and although this acts as a negative on the world economy as currency wars ensue those who get their devaluations in fastest [Japan] tend to outdo the johnny come latelys [Euro or more so the dollar]. On the wider issue of monetary effectiveness. They still haven't tried helicopter money.There seems widespread agreement that this would be capable of raising prices, so averting deflation but the peasants don't have sufficient clout to get in front of the queue for handouts at the Bank.
Helicopter money = Fiscal PolicyPretty much.
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