<blockquote>'..frankly, I think it’s worse than 2007..'
- William R. White (Context:
'..frantic pounding on the central bank panic button that invites tit-for-tat retaliation around the world..')</blockquote>
'I believe central bank measures implemented in the summer of 2012 will go down in history as a catastrophic mistake – akin to Benjamin Strong’s infamous 1927 market “coup de whiskey.” .. I’m convinced the world is a much more dangerous place today than back in 2012. I don’t believe serious structural issues can be resolved by central bank monetary inflation. And I don’t view central bank market backstops as conducive to financial stability. Quite the opposite: increase the scope of a market backstop and you’ll correspondingly increase the size of the speculative Bubble.'<blockquote>'I believe central bank measures implemented in the summer of 2012 will go down in history as a catastrophic mistake – akin to Benjamin Strong’s infamous 1927 market “coup de whiskey.” These measures unleashed powerful “Terminal Phase” Bubble excess in U.S. stocks, Credit and assets markets; Japanese equities; Chinese Credit; European stocks and bonds; EM Credit, etc. Already destabilizing speculation was further stoked, while necessary global financial and economic adjustments were obstructed.
..
Call me a nut, but I’m convinced the world is a much more dangerous place today than back in 2012. I don’t believe serious structural issues can be resolved by central bank monetary inflation. And I don’t view central bank market backstops as conducive to financial stability. Quite the opposite: increase the scope of a market backstop and you’ll correspondingly increase the size of the speculative Bubble. From Spiegel’s reporting, we now know that it was the U.S. and Italy that first pressed for a big (Fed-like) ECB/Eurozone financial backstop. Germany balked.
Now viewed as “one of the most successful monetary policies” ever, I believe the ECB backstop ensured only more dangerous excess. Financial asset mispricing has gone to greater extremes and speculative excesses have intensified. Underlying debt fundamentals have continued to deteriorate. Yet complacency is only more deeply entrenched. This creates latent financial and economic fragility. Meanwhile, global Bubbles stoke inequality and animosity around the world.
..
Financial Times (Peter Spiegel): “…Less than a year after that November 2011 night, the existential crisis for Europe’s single currency would, for all intents and purposes, be over. The markets that once threatened to tear the euro apart would be tamed… When the history of the eurozone crisis is written, the period from late 2011 through 2012 will be remembered as the months that forever changed the European project. Strict budget rules were made inviolable; banking oversight was stripped from national authorities; and the printing presses of the European Central Bank would become the lender of last resort for failing eurozone sovereigns.”
There’s a far-reaching contradiction that I fear is going to come back to bite Europe. To “save” the euro, a small cadre of officials, including President Obama, had to impose a more unified and uniform Europe. More rules, restraints and operations dictated from Brussels and Frankfurt; less individuality and sovereignty for citizens, politicians and governments throughout a diverse and unsettled continent. Yet powerful secular forces – in Europe and globally – are pulling persistently in the exact opposite direction: less integration and less cooperation – deeper animosities and separatist proclivities..'
- Doug Noland,
How the Euro was (Really) Saved, May 23, 2014</blockquote>
Context Banking Reform<blockquote>
'Benjamin Strong .. his famous stock market “coup de whiskey” in 1927..' - 'Today’s .. increasingly unstable equities market Bubble..''..there’s too much left unlearned from the Fed’s checkered 100-year history.' - '..made the Second World War possible, though not inevitable..'(Praxeology) - Review: Money, Bank Credit, and Economic Cycles</blockquote>