All Posts Tagged With: "central banks"

Australia’s future is inextricably linked to China and the commodity “super boom”. Australian economic prospects remain vulnerable to international developments outside its control.

The Fed has goals for unemployment and inflation. Targets. And it moves its policies around in order to achieve its goals. Of course, it doesn’t necessarily hit its goals.

Europe’s Financial Transactions Tax (FTT) may disincentivise financial transactions by adding to their marginal cost. But as long as the supply of credit and cheap money to the banking system remains abundant, the banks have an open invitation to speculate.

Before we say goodbye to 2011, let us pause to remember it…briefly. We spent 365 days with it – 365 days in a row. We can’t just move on to 2012 without a least a backward glance. What kind of a year was it? In what direction did it take the world, dear reader? Should we cheer that it is gone…or merely dry our eyes and hope for the best?

The break over Christmas is a pretty convenient time for politicians to spring something unexpected on you. Well, unexpected for those who don’t read the Daily Reckoning, that is.

So here is a list of things the governments of the world might unleash on you and your portfolio over the holidays:

So far, the Great Correction has followed the usual script. Bond yields have fallen. Price inflation has generally come down. But demand for credit — as evidenced by $10 trillion government financing costs — is running hot. This is no typical downturn. And it wouldn’t be too surprising if all this demand for credit pushed up bond yields.

All central banks are desperate to stop stress from building in the global banking system. Despite what they say, job No. 1 of every central bank is to do whatever it takes to prevent a disorderly collapse of banks caused by “bank runs.”