Thursday, June 7, 2012

Preparing to Push on a String

"When monetary policy cannot entice consumers into spending more money or investing in an economy, even if monetary policy is loosened to to put more money into peoples' hands. This term is often attributed to noted economist John Maynard Keyenes." see here

So the worlds Central Banks appear to be readying for a massive coodinated stimulus. A one stop flood of liquidity that will fix the pesky debt problem for good. No more dilly-dallying and talk-fests. Tomorrow, Ben Bernanke is giving testimony to congress about the state of the US economy and is likely to hint at this new QE coming, or at least just some Fed stimulus.

This idea of 'massive coordinated intervention' has been predicted by many astute commentators for years. I won't bore you with why it won't work, but suffice to say, Keynes was right for a change. You can't push on a string. No matter what they do now, the system cannot be fixed.

It appears to me that the time of reckoning is very close. One week, 1 month? Who knows. Confidence at the highest levels of wealth management are shot. These people have been shifting money to safe places for weeks now.

Once again we await the utterances of a Central Banker to determine the course of our lives. Well, I for one, ain't waiting.


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