domingo, outubro 20, 2013

Monetary dictatorship

We All Know Who Janet Yellen Is, And That's Terrifying por Brendan Brown:
If we were living in a stable monetary order she would be the least powerful woman in the world. Think back to the era of the gold standard before 1914. Britain was the leader of the orchestra in the monetary system. But no one outside a few discount brokers in London knew the name of the Bank of England Governor, who changed each 2 years.

The name and personality of the Governor was unimportant because in that monetary system (gold) a set of automatic rules determined the growth of high-powered money supply whilst interest rates were free of manipulation and market determined ..
The dollar monetary system presided over by the Federal Reserve through the chairmanships of Alan Greenspan and then Ben Bernanke has gravitated towards the opposite end of the pole. The Maestro presides over the setting of short-term interest rates whilst attempting to gain increasing power to determine long-term interest rates. The Maestro sees himself as pulling key levers which determine the macro-economic outcome ..
The doctrine is deeply flawed. Its pursuance has produced violent cycles of asset price inflation and deflation including the greatest financial panic and greatest recession in modern times and now the weakest economic recovery ever from great recession ..

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