Surprise, Central Banks Are Printing Money to Bail Out Their Owners

Remember that central banks are private institutions owned by dynasties and institutions that manipulate the money supply to benefit themselves, not the rest of us.  Just ask your savings account how much it has returned to you lately.  Interest rates are purposely pushed to the bottom purportedly to keep the economy stimulated by motivating people to borrow and spend, just what the growing poor and middle class need to do when their houses just tanked in value or they lost them altogether.  Their 401ks took a dive as well, probably still hasn't recovered from the 2008 dip.  And now there is a threat of another?  Boom bust cycles are purposefully created and controlled.  Don't be a fool.

Central Bankers Are Not Omnipotent

Submitted by Tyler Durden on 07/07/2012 - 21:40Bank of England Ben Bernanke Ben Bernanke Bond Borrowing Costs Central Banks European Central Bank Federal Reservefixed headlines Japan Monetary Policy Money Supply New Zealand Real estate Risk Premium Switzerland United KingdomYield Curve

A generation of market participants has grown up knowing only the era of central bankers and the 'Great Moderation' of (most of) the last two decades elevated their status significantly. While central bankers are generally very well aware of the limits of their own power, financial markets seem inclined to overstress the direct scope of monetary policy in the real world.

If markets fall, investors need only to run to central bankers, and Ben Bernanke and his ilk will put on a sticking plaster and offer a liquidity lollipop to the investment community for being such brave little soldiers in the face of adversity

Monetary policy impacts the real economy because it is transmitted to the real economy through the money transmission mechanism. This has become particularly important in the current environment, where, as UBS' Paul Donovan notes, some aspects of that transmission mechanism have become damaged in some economies. Simplifying the monetary transmission mechanism into four very broad categories: the cost of capital; the willingness to lend; the willingness to save; and the foreign exchange rate; UBS finds strains in each that negate some or all of a central bank's stimulus efforts. In the current climate, it may well be that the state of the monetary transmission mechanism is even more important than monetary policy decisions themselves. Some monetary policy makers may be at the limits of their influence.