Daily Archives: October 30, 2014

How the Fed got from eternity to here – FT.com

October 30, 2014 By in Business Administration, Central banks, Euro Crisis, Fiscal Policy, Monetary Policy, Politics 1 Comment
English: The Marriner S. Eccles Federal Reserv...

English: The Marriner S. Eccles Federal Reserve Board Building (commonly known as the Eccles Building or Federal Reserve Building) located at 20th Street & Constitution Avenue, NW in the Foggy Bottom neighborhood of Washington, D.C. Designed by architect Paul Philippe Cret in 1935, construction of the Art Deco building was completed in 1937. Its 2009 property value is $109,029,200. (Photo credit: Wikipedia)

This is currently the Financial Times‘ most-read article. It’s a recommended read. Check it out!

How the Fed got from eternity to here – FT.com.

The article looks at the history of QE. QE hass been incredibly succesful but it has had negative consequences, especially in the developing world. The Eurozone failed to embrace QE effectively because of political push-back from Germany.

I wonder how history will judge QE?

Thoughts?

QE central bankers deserve a medal for saving society – Ambrose Evans-Pritchard Telegraph

October 30, 2014 By in Austerity, Business Administration, Central banks, Central Government, Euro Crisis, Fiscal Policy, France, Germany, Growth, Italy, Monetary Policy, People, Politics, UK, US 1 Comment
English: Angela Merkel Deutsch: Angela Merkel

English: Angela Merkel Deutsch: Angela Merkel (Photo credit: Wikipedia)

This is an excellent, must-read article from Ambrose Evans-Pritchard, Business Editor at the Telegraph. Check it out!

via QE central bankers deserve a medal for saving society – Telegraph.

Personally, I broadly endorse this article. Had the US and the UK not invoked QE, there was indeed a risk of society collapsing, with widespread violence in the streets. Compared to the risky but bold approach from the Anglo-Saxon economies, Germany has led the Eurozone to the antithesis, crisis after crisis, frequently testing economic, social and political boundaries to the limits. Germany has insisted on austerity and balanced budgets in Europe, refusing to give the ECB the authority for large-scale QE.

On the other hand, Germany can point to Southern Europe being slow to reform their economies, like removing labor market inflexibility in France and Italy.

Of course, there have been massive winners and losers since 2008. The ultra wealthy and the bankers have done incredibly well. The US and UK economies have rebounded. China too was bold after 2008 and her aggressive public sector investment saved her economy. In contrast, the Eurozone has been in a cancerous state.

I still believe that there is room for the Eurozone to belatedly offer massive stimulus to stop the cancer? Do you agree?

Thoughts?