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Entries Tagged as 'Monetary policy'

Why The Fed Critics Are Wrong | Seeking Alpha

January 10th, 2016 · Comments Off on Why The Fed Critics Are Wrong | Seeking Alpha

The Fed is under a host of criticism for its accommodating monetary policy. We think the criticism is largely missing the mark. It’s much easier to recognize asset bubbles after they have popped, and there are other instruments available to deal with them besides monetary policy. Also, the link between monetary policy and credit creation […]

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Tags: Monetary policy

The One Reason Why The Fed Shouldn’t Raise Rates | Seeking Alpha

January 8th, 2016 · Comments Off on The One Reason Why The Fed Shouldn’t Raise Rates | Seeking Alpha

Domestically, there are some reasons for the Fed to raise rates, which we quickly survey. However, waiting a bit wouldn’t entail big risks either. If one considers the world economy at large, there are huge risks from a Fed rate hike now. We can’t believe they are prepared to take them. Source: The One Reason […]

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Tags: Monetary policy

‘QE Will Permanently Impair Living Standards For Generations To Come’ | Seeking Alpha

June 29th, 2015 · Comments Off on ‘QE Will Permanently Impair Living Standards For Generations To Come’ | Seeking Alpha

In some corners, “money printing” is like the original sin, it’s blamed for all economic problems and language tends to go into overdrive. Closer inspection reveals that behind much of the strong language there is surprisingly weak economics. A cooler assessment reveals that QE is neither a miracle cure, nor the mother of all economic […]

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Tags: Monetary policy

The Day The Central Bank Powers Came To An End

March 22nd, 2015 · Comments Off on The Day The Central Bank Powers Came To An End

Central banks in the developed world have just about thrown everything and the kitchen sink at the forces of deflation, with fairly little to show for it. After the US and the UK, the Swiss have now been the third to throw in the towel. Is this a general retreat? Are we going to succumb […]

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Tags: Monetary policy

Serving 2 Masters At A Time?

February 14th, 2015 · Comments Off on Serving 2 Masters At A Time?

Monetary policy cannot serve both economic stability and financial stability at the same time. The use of monetary policy to achieve financial stability is a blunt instrument, producing widespread collateral damage in the economy. Monetary policy should be aimed at economic stability. In order to achieve financial stability, new instruments are needed, here we discuss […]

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Tags: Monetary policy

Fooled By The Fed, Again?!

December 31st, 2014 · Comments Off on Fooled By The Fed, Again?!

After a steep fall, financial markets have once again bolted higher. According to some, this rebound was caused by some comments from Fed officials. But isn’t it curious that a mere whisper from some Fed official can turn around financial markets to the tune of trillions of dollars. Especially for those that tout the robust […]

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Tags: Monetary policy

After The Veil Of QE Is Lifted…

December 13th, 2014 · Comments Off on After The Veil Of QE Is Lifted…

There are many critics of QE, and indeed it does have limited real effects and produces some risks. However, now that the veil of QE is being lifted, what is revealed is a rather ugly world in which a host of deflationary forces conspire to take definite root. The US has, for now, managed to […]

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Tags: Monetary policy

Deflation, Rather Than Inflation Was Always The Bigger Risk

December 13th, 2014 · Comments Off on Deflation, Rather Than Inflation Was Always The Bigger Risk

In 2010, a host of people wrote an open letter to the Fed warning against the inflationary risks of unconventional monetary policy. Recently it turned out that none of these signatories repented. We’ll argue that they got their risk assessment inside-out and explain why deflation was always the much bigger risk. To The Fed’s Critics: […]

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Tags: Monetary policy

To Raise Or Not To Raise…

December 4th, 2014 · Comments Off on To Raise Or Not To Raise…

A primer on the arguments pro and contra tightening monetary policy. Those who are in favor fear asset bubbles, rising wages and want to protect income from savers. Those who are against argue that rising rates risks the recovery, inflation is low, rates would be low in the absence of Fed expansionary policies and there […]

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Tags: Monetary policy

Monetary Madness

December 1st, 2014 · Comments Off on Monetary Madness

The blitz most of the central banks in advanced nations have unleashed on the world is actually the least effective, and the most risky, way to stimulate economies. Its main transmission channel is to stuff money into banks in order to entice households to borrow more at exactly the time when they’re least likely to […]

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Tags: Monetary policy