'Their monetary strategy isn't found in standard textbooks. The central bankers are, in effect, conducting a high-stakes experiment, drawing in part on academic work by some of the men who studied and taught at the Massachusetts Institute of Technology in the 1970s and 1980s.
..
Economists at the BIS, meanwhile, have grown more skeptical about the central bank tilt. They say their warnings of a credit bubble were ignored before the financial crisis. "Nobody took it seriously," said William White, formerly the top BIS economist.'<blockquote>
..Risky Bets of Central Banks'BASEL, Switzerland—Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.
The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world's biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world's economic output.
Of late, these secret talks have focused on global economic troubles and the aggressive measures by central banks to manage their national economies. Since 2007, central banks have flooded the world financial system with more than $11 trillion. Faced with weak recoveries and Europe's churning economic problems, the effort has accelerated. The biggest central banks plan to pump billions more into government bonds, mortgages and business loans.
Their monetary strategy isn't found in standard textbooks. The central bankers are, in effect, conducting a high-stakes experiment, drawing in part on academic work by some of the men who studied and taught at the Massachusetts Institute of Technology in the 1970s and 1980s.
..
Three of the world's most powerful central bankers launched their careers in a building known as "E52," home to the MIT economics department. Fed Chairman Ben Bernanke and ECB President Mario Draghi earned their Ph.D.s there in the late 1970s. Bank of England Governor Mervyn King taught briefly there in the 1980s, sharing an office with Mr. Bernanke.
..
Many economists emerged from MIT with a belief that government could help to smooth out economic downturns. Central banks play a particularly important role in this view, not only by setting interest rates but also by influencing public expectations through carefully worded statements.
While at MIT, the central bankers dreamed up mathematical models and discussed their ideas in seminar rooms and at cheap food joints in a rundown Boston-area neighborhood on the Charles River.
..
Economists at the BIS, meanwhile, have grown more skeptical about the central bank tilt. They say their warnings of a credit bubble were ignored before the financial crisis. "Nobody took it seriously," said William White, formerly the top BIS economist.
Now, he said, the central banks may again be steering toward long-term troubles in their elusive quest for short-term growth.'
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Inside the Risky Bets of Central Banks, December 12, 2012</blockquote>
Context Hitler’s Specter Inspires Bill White to Battle With Greenspan<blockquote>
'..the theorem of the economic impossibility of socialism .. is fully applicable to central banks.. - Jesús Huerta de Soto
Banking Reform..a historic day in Austrian economics. Today a Ph.D.-level seminar in Austrian economics..''Again, the only thing the Fed admits to wanting to 'prop up' are not equities, nor gold, or any other specific investment asset besides bonds (obviously it is buying bonds with the aim of artificially suppressing interest rates); its declared aim is to prop up 'economic activity' in the hope that this will lower the rate of unemployment. It does so by trashing the currency it issues, which has been a time-honored method since the time of Roman emperor Diocletian and has
never worked in all of history, which evidently hasn't kept people from attempting it over and over again (a form of insanity, if you will). So the only thing we can really say is: “The people in charge of monetary policy are either extremely misguided or downright insane. Place your bets accordingly”.'
- Acting Man,
The Investment Everybody Loves to Hate, December 14, 2012</blockquote>