Read this article, and go where it leads you! The fortitude of the Brits shows vastly greater support than in America; methinks, this may be due to having already endured a Thatcher rather than a Reagan, who only manned up in 1987. Brits remember Thatcher straightening out the shoddy budget practice, and genuine economic gains did result. We got the S&L Bailout, and Clinton stabilization. This was fine, except that Clinton surrendered in 1997 due to personal attacks. Tax-Cutters imagined Victory, and think continually to extend it. This later sentiment has already destroyed the Clinton stabilization, and will soon destroy the Country.
This Post may be a little challenging for those of my Readers who are like me, somewhat deficient in the arena of details. It is all about the leadership of a foreign central bank. I bring mysticism to the discussion because here is the Question to be asked: Can any institution operating in an environment larger than itself hope to avoid reducing to being simply another Player on the market? I ask this because the Federal Reserve suffers from the same possibilities. A Player influences the markets, but cannot control them. They also possess a most disturbing aspect: their action, or lack of action, comes to be expected, and thereafter figured into the Pricing of all aspects of the markets. Under this Scenario the institution in examination imposes an new Opportunity Cost into the entire matrix of markets, increasing the costs of doing Business without intention; the Whole shifting the Supply Curves downward. The situation actually makes an economy more recessive, and Recovery much more difficult.
I will now give my Readers this Post. I prefer Professor Stiglitz’s analysis here. Here are the things I consider important. Past labor is being discounted with the loss of value in the Dollar, and the lack of Interest paid to Depositors, and owners of Treasuries. I would put up model presentations if more acclimated to such graphing, but can exclaim that the current policy of the Fed seeks to cancel the power of the Baby Boomers, through artificial loss of Wealth. Joe Stiglitz is absolutely right in the claim that equity Prices will be only marginally affected, and that Investment will not likely increase at all. What worries me is the fact that Banks will show no increased inclination to loan to small and Intermediate businesses. The American people are posed to lose a great amount of their economic advantage for very little Gain for the interior economy. lgl