“Bold, new”, but ineffective, moves by central banks today signals the fragile nature of the state of the worlds’ economies. They cut rates again in order to stimulate growth. Push interest rates low enough, they believe, and prosperity will follow. Unfortunately, they have misunderstood the nature of this economic crisis and are doing the opposite [...]
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More observations from Deutsche Bank’s Chief Economist, Thomas Mayer. Eurozone: Opening Pandora’s box November 7, 2011 The domestic turmoil in Greece has diverted attention from a far bigger development in the crisis. For the first time, eurozone leaders were willing to openly acknowledge that a member state might actually leave the euro. In Cannes, Merkel [...] Under its “operation twist” the Fed will shift USD 400 bn of its Treasury portfolio with maturities of 3 years or less into 6 to 30-year maturities. In addition, it will reinvest principal payments from agency debt and agency MBS back into the agency market, to prevent a further spread widening between Treasurys and mortgage [...] |
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