Though western central banks have not been printing nearly as fast as their Zimbabwe counterpart, they do have a long history of increasing the money supply. It forces one to ask how much of the growth in Western stock markets over the preceding twenty-five years has been created by a vastly increasing money supply, and how much is due to actual wealth creation.
A correspondent on the LRC blog refers to the
Bob Greifeld, the President and CEO of Nasdaq, was once a great critic of Sarbanes-Oxley (SOX), citing the anti-competitive drag that SOX helped to
Short sellers are no more self-interested than others in financial markets. They improve the information incorporated in market prices that we all rely on to improve social coordination, as we seek to make the best of a world of unavoidable scarcity.
I have been covering the emerging trend of central banks “investing” their accumulated forex reserves in equity markets.
To conclude then, as long as the pool of real funding available to Americans is still growing, and as long as the growth momentum of liquidity is heading up, US financial markets will remain well supported regardless of the yen carry trade.
It’s one thing for a firm to guard its own secrets, and enforce those rules with internal sanctions.
We can thus conclude that it is irrelevant for the multiplier process whether the central bank targets the quantity of money or the interest rate. What matters here is that the central bank is always ready to accommodate commercial banks' expansion of credit out of thin air. Without the central bank's support the likelihood of a sustained multiplier process taking place is close to nil. Hence the notion of the money multiplier is not applicable to a truly free-market economy.
Ah, nothing focuses the mind that a good ol’ fashioned stock market sell-off.
