For the world’s financial markets which have become literally dependent on the pronouncements of central banks, this week is lining up to be one of the most important in a long time. Because this week no less than 4 of the world’s most powerful central banks are each meeting to discuss quantitative easing (debt buying by central banks) and interest rate decisions, and to then ‘inform’ financial markets to what extent they will be kept on life-support stimulus.
First up is the operator of the world’s most influential fiat currency, the US Federal Reserve, whose Federal Open Market Committee (FOMC) meets over two days between Tuesday 14 and Wednesday 15 December, and then tells markets whether it will taper (decelerate it’s interventions) while engaging in Management of Perception Economics (MOPE) about future interest rate hikes (hint: they can’t raise rates). Following this, the Governing Council of the European Central Bank (ECB) meets on Thursday 16 December, and will also then pronounce about if and when it will scale back it’s trillions of interventional asset purchases, the leading two of which the ECB calls an ‘Asset Purchase Programme (APP)’ and a ‘Pandemic Emergency Purchase Programme (PEEP). Also expect ECB jawboning about interest rate increases but no rate move. On the same day, Thursday 16 December, the Bank of England’s Monetary Policy Committee (MPC) meets to also discuss interest rate increases. But the MPC will most likely use the convenient Omicron propaganda (rampant across mainstream UK media) as an excuse to leave UK interest rates unchanged. The same day on Thursday 16 December, the perennial interventionalist Bank of Japan (BoJ) begins a 2-day Monetary Policy Meeting (MPM), and in the same vein will chit-chat about decelerating asset purchases and raising interest rates, but in the end, as usual, the BoJ will do nothing. If you think about it, it’s ludicrous that the world’s so called ‘free market’ financial markets are hanging on the every word of a private banking cartel (the US Federal Reserve) for a signal about whether this same US Fed will scale back (taper) it’s massive interventions (asset purchases) into these so-called ‘free markets’. The same is true of the Fed’s colleagues at the ECB, Bank of England and BoJ. This is literally like a bunch of drug addicts (the markets) waiting to see if a drug cartel has enough drugs to sell to them all, or will the cartel dealers need to ‘taper’ the supply. The question that the mainstream financial media should be asking (but never asks), is why central banks need to intervene in bond and equity markets at all. The answer of course is clear, that without central bank interventions, the entire debt based financial system would implode. Each of these central bank decision making bodies also knows that they are now in unchartered territory and that they have painted themselves into corners with unprecedented asset purchases and historically low interest rates which they cannot reverse without imploding the system, as all the while inflation continues to accelerate across the board. So expect a lot of jawboning from the Fed, ECB, BoE and BoJ, as well as a lot of MOPE. But don't expect anything concrete or any change in direction from these central banks. For in the words of Max Keiser, “You can’t taper a Ponzi”.
0 Comments
Leave a Reply. |
Thank you for choosing to make a difference through your donation. We appreciate your support.
This website uses marketing and tracking technologies. Opting out of this will opt you out of all cookies, except for those needed to run the website. Note that some products may not work as well without tracking cookies. Opt Out of CookiesCategories
All
Archives
April 2024
|