Tuesday, June 26, 2012

Has the pin to prick the bubble appeared?

Early this morning, I had felt uncomfortable reading Andy's insistence that central banks should creatively open the monetary spigots in this dire moment. I want to agree with him but I also felt that I can't. These is a very difficult moment.

Cheap money has turned out be a narcotic. Governments have been taking it and not putting to good use the time it had bought them. I worry.

Just moments ago I discovered an article by Simon Nixon reporting on the BIS. I wonder if central bankers have not finally decided to take the pin to prick the bond bubble and with it every asset class. That would be hellish but politicians have left central bankers without choice.

Prior to all these, I have noticed Bernanke did not lift his finger to help Obama in an election year. If he doesn't provide liquidity now, it would be very inconvenient nearer the presidential elections. It would also be too late.

I think central bankers are just fed up with their politician colleagues. They may be starting to see themselves as accessories instead of providing timely aid as the cowardly and feckless politicians allow us to be carried to the edge of the cliff. Central bankers are not like politicians, they are more akin to priests in the temple of money.

Not that we desire, but we might be starting to see interest rates going up, which we most certainly cannot afford. Am I talking rubbish here? This is too scary. I must watch and work through this over and over again.

1 comment:

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