“How can 12 men and women sit on a committee and think they can fine-tune the economy without creating imbalances and unintended consequences?” John Mauldin

“In my latest book Code Red, I fully acknowledge the need for a central bank, but my view of its purpose is quite a bit more limited than is envisioned in the current manifestation. How can 12 men and women sit on a committee and think they can fine-tune the economy without creating imbalances and unintended consequences? Central banks should be for emergencies and for regulating banking institutions and making sure the playing field is level. They should not be responsible for the fate of the players on the field.

Current central bank policy has rewarded bankers and holders of assets. In an environment where everyone seems to be increasingly worried about the divide between the 1% and the 99%, our central bank has designed and implemented a policy that is explicitly rewarding the 1% to the detriment of savers and retirees. It is the rich who have assets and the poor who have liabilities. If you are looking for a reason why the spread between the rich and the poor is widening, one driver (and I admit there are others) is central bank policies of the developed world.

The Fed believes that they are saving the world, and that any problems that persist in the world can be eliminated by doing more of what they’ve been doing and doing it for longer. I know this comes as a complete surprise to anyone who’s been paying the least amount of attention over the past few years, but there you have it.” John Mauldin, President, Millenium Wave Securities, November 2013.

Posted on November 25, 2013, in Postings. Bookmark the permalink. 1 Comment.

  1. Another bull’s eye, Mike. The loose money policy of Bernanke’s Fed, which is likely to be continued by his replacement, is strongly favored by the Obama administration and the Dems. Ironic that younger Americans, Occupy Wall Streeters (and their ilk), and other Obama supporters are being disadvantaged by these policies as the Fed’s money printing and asset buying program is inflating the assets of the 1-percenters at the expense of the young Obama-ites, on whose futures the mounting debt is being piled.

    Mark Nelson 3256 Sitio Tortuga Carlsbad, CA 92009 760.473.7558 mnelson.doit@gmail.com

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