Central Bank
Governors Are Liars
Global Research,
March 04, 2016
Theme: Global Economy
Central Banks are
complicit in the manipulation of financial markets including stock markets,
commodities, gold and currency markets, not to mention the oil and energy
markets which have been the objective of a carefully engineered “pump and dump”
speculative onslaught.
Who controls the
central banks? Monetary policy does not serve the public interest.
The article below by
Washington Blog quotes three influential central bankers:
Mark Carney, Meryl
King and Alan Greenspan.
The current governor
of the Bank of England Mark Carney (image below) is a former Senior Goldman
Sachs Executive.
He went from Goldman
to heading the Bank of Canada before being appointed Governor of the Bank of
England.
At the time of his
appointment he was not a citizen of the United Kingdom. A precedent was set:
Mark Carney was the first foreigner to occupy that position since the founding
of the Governor and Company of the Bank of England in 1694.
The issue was barely
mentioned by the British media.
While Carney was
appointed by Her Majesty, unofficially, he still has “links” to Goldman Sachs.
Is he in conflict of
interest in relation to Goldman Sachs’ recent insinuations regarding the
stability of the British Pound Sterling were the UK to leave the EU?
Insinuations of this
nature combined with inside information are the basis for large scale
speculative operations:
Daily Mail, February
2, 2016
Was Goldman Sachs’
claim really undermined by Bank of England Mark Carney as suggested by the
British media? (See above) Carney served 13 years for Goldman Sachs.
Alan Greenspan,
quoted below, largely served Wall Street. Lest we forget The Federal Reserve is
a private banking institution.
The abstract views
provided by Mark Carney, Mervyn King and Alan Greenspan focus on weaknesses of
the real economy. What they fail to mention is that market manipulation and
financial fraud –which are now an integral part of neoliberalism– are
largely responsible for the crisis of the real economy.
In this regard,
central banks share a large burden of responsibility in creating a “regulatory”
environment which favors the “institutional speculators”.
Real economy
explanations presented by Carney et al are in many regards misleading.
The price of crude
oil did not collapse as a result of supply and demand considerations. The
price of crude was pushed up and pushed down through a carefully designed
speculative undertaking involving Wall Street and the Anglo-american Oil
conglomerates.
Michel Chossudovsky, March
4, 2015
* *
*
Central Bankers
Admit that Central Banks Have Failed to Fix the Economy.
by Washington’s Blog
March 2016
Between 2008 and
2015, central banks pretended that they had fixed the economy.
In 2016, they’re
starting to admit that they haven’t fixed much of anything.
The current head of
the Bank of England (Mark Carney) said last week:
The global economy
risks becoming trapped in a low growth, low inflation, low interest rate
equilibrium. For the past seven years, growth has serially
disappointed—sometimes spectacularly, as in the depths of the global financial
and euro crises; more often than not grindingly as past debts weigh on
activity ….
This
underperformance is principally the product of weaker potential supply
growth in virtually all G20 economies. It is a reminder that demand
stimulus on its own can do little to counteract longer-term forces of demographic
change [background] and productivity growth.
***
In most advanced
economies, difficult structural reforms have been deferred [true,indeed]. In parallel, in a number of emerging market
economies, the post-crisis period was marked by credit booms reinforced by
foreign capital inflows [including fromcentral banks themselves], which are now brutally
reversing….
Since 2007, global
nominal GDP growth (in dollars) has been cut in half from over 8% to
4% last year, thereby compounding the challenges of private and public
deleveraging ….
Renewed appreciation
of the weak global outlook appears to have been the underlying cause of recent
market turbulence. The latest freefall in commodity prices – though
largely the product of actual and potential supply increases – has reinforced
concerns about the sluggishness of global demand.
***
Necessary changes in
the stance of monetary policy removed the complacent assumption that “all
bad news is good news” (because it brought renewed stimulus) that many
felt underpinned markets [Zero Hedge nailed it].
***
As a consequence of
these developments, investors are now re-considering whether the past seven
years have been well spent. Has exceptional monetary policy merely
bridged two low-growth equilibria? Or, even worse, has it been a pier,
leaving the global economy facing a global liquidity trap? Can more time
be purchased? If so, at what cost and, most importantly, how would that
time be best spent?
***
Despite a recent
recovery, equity markets are still down materially since the start of the
year. Volatility has spilled over into corporate bond markets with US
high-yield spreads at levels last seen during the euro-area crisis. The
default rate implied by the US high-yield CDX index is more than double its
long-run average [background here and here]. And sterling and US dollar investment grade
corporate bond spreads are more than 75bp higher over the past year.
Similarly, the
former head of the Bank of England (Mervyn King) is predicting catastrophe:
Unless we go back to
the underlying causes [of the 2008 crash] we will never understand what
happened and will be unable to prevent a repetition and help our economies
truly recover.
***
The world economy
today seems incapable of restoring the prosperity we took for granted before
the crisis.
***
Further turbulence
in the world economy, and quite possibly another crisis, are to be expected.
***
Since the end of the
immediate banking crisis in 2009, recovery has been anaemic at best. By late
2015, the world recovery had been slower than predicted by policymakers,
and central banks had postponed the inevitable rise in interest rates for
longer than had seemed either possible or likely.
There was a
continuing shortfall of demand and output from their pre-crisis trend path of
close to 15pc. Stagnation – in the sense of output remaining persistently below
its previously anticipated path – had once again become synonymous with the
word capitalism. Lost output and employment of such magnitude has revealed the
true cost of the crisis and shaken confidence in our understanding of how
economies behave[Correctomundo].
***
Almost every
financial crisis starts with the belief that the provision of more liquidity is
the answer, only for time to reveal that beneath the surface are genuine
problems of solvency [We told you].
A reluctance to
admit that the issue is solvency rather than liquidity – even if the provision
of liquidity is part of a bridge to the right solution – lay at the heart of
Japan’s slow response to its problems after the asset price bubble burst in the
late 1980s, different countries’ responses to the banking collapse in 2008, and
the continuing woes of the euro area.
Over the past two
decades, successive American administrations dealt with the many financial
crises around the world by acting on the assumption that the best way to
restore market confidence was to provide liquidity – and lots of it.
Political pressures
will always favour the provision of liquidity; lasting solutions require a
willingness to tackle the solvency issues.
Former Federal
Reserve chairman Alan Greenspan said today that the Dodd-Frank financial bill didn’t
fix anything [d’oh!], that we’re in real trouble, and that he’s been
pessimistic for a long time:
We’re in trouble
basically because productivity is dead in the water…Real capital investment is
way below average. Why? Because business people are very uncertain about the
future.
***
The [Dodd-Frank]
regulations are supposed to be making changes of addressing the problems that
existed in 2008 or leading up to 2008. It’s not doing that. “Too Big to Fail”
is a critical issue back then, and now. And, there is nothing in Dodd-Frank
which actually addresses this issue.
***
I haven’t been
[optimistic on the economy] for quite a while.
And the world’s most
prestigious financial agency – called the “Central Banks’ Central Bank” (the
Bank for International Settlements, or BIS) – has consistently slammed the Fed and other central banks for doing the wrong things
and failing to stabilize the economy.
The original source
of this article is Global Research
Copyright © Prof Michel Chossudovsky and Washington's Blog, Global Research, 2016
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