Observation is not a talent or capability of any member of the Federal Reserve.
June 11 (Bloomberg) — Federal Reserve Bank of Philadelphia President Charles Plosser said the U.S. economic recovery is broadening and that the central bank could begin to sell assets from its balance sheet “sooner rather than later.”
Back in the real world, the dominoes continue to fall.
“Greece will eventually default on its debt because the country is highly indebted, Carl Weinberg, chief economist at High Frequency Economics, said on CNBC this morning.”
When he was Japan’s finance minister, Naoto Kan advocated loose monetary policy to end two decades of deflation.
But since his sudden promotion to prime minister, Kan has been crying out about public debt levels. Today, he even used the signal word for austerity: Greece.
by F. William Engdahl
Global Research, February 24, 2010
The decision of the US Federal Reserve to raise its key interest rate was definitely not a sign of confidence in the US economic recovery or a signal that Fed policy is slowly returning to normal as claimed. It was rather a signal of panic over the weakness in US Government bond markets, the heart of the dollar financial system.
Financial markets have reacted with jubilation, by buying dollars and selling Euros, at the decision by the Fed to raise rates for the first time since 2006 for its so-called Discount Rate, going from 0.5% to 0.75%. The Discount Rate is the interest rate charged for banks to borrow from the central bank. At the same time the Fed left its more important short-term Fed Funds rate unchanged and historically low — between 0.0% and 0.25%. In its official statement the Board of Governors said the rate move was intended to push private banks back into the private inter-bank borrowing market and away from reliance on Federal Reserve subsidized money which had been provided since the financial crisis began in August 2007.
The decision, in plain words, was framed so as to give the impression of a ‘return to business as usual.’ At the same time, financial players like George Soros continue to speak openly about the fundamental weakness of the Euro. This has the effect of taking speculative pressure away from fundamentally worse economic and financial fundamentals within the dollar zone at the expense of the Euro. The reality is that the dollar world is anything but returning to ‘normal.’