Liquidity injection by central banks

Discussion in 'Economics' started by kashirin, Aug 9, 2007.

  1. Are they complete idiots?
    Even preschool child knows there is a huge, enormous credit bubble and it must be deflated

    They wanted to hike rates in a month and now instead of apllauding to healthy market correction they inject 100 Bln euro because libor went 50 points higher

    What those injection provide -just additional air to the bubble so burst will happen faster and bigger

    From the other side it's good to know Euro zone friends are the same level idiots as Bush and Greenspan
  2. Central banks are socialist institutions. Government institutions in a socialist economy exist to protect the interests of special interests, for example the communist party in the URSS, and greedy stupid bankers in a fiat money economy.
  3. They're not really STUPID. They're actually quite clever [read, "morally criminal"] in the way they siphon-off/confiscate the buying power of the citizenry's wealth.
  4. How smart is killing the goose that lays the golden eggs.
  5. There is cleverness in their method. They "frog" the public. Most of us don't even realize we're being frogged let alone who's doing it to us. After all, if they were too obvious and blatant, we'd protest...
  6. Good point.
  7. bsivia


    I am just a little confused, not trying to question you, but how are they confiscating wealth if they are injecting money into the system?

    You mind elaborating?
  8. It means there is more money in the system to purchase the same quantity of goods as before. Meaning your cash holdings buy less goods than before so you now are poorer.
    Its called 'inflation'.
    It works by injecting 'free' cash through the banks, who receive purchasing power out of thin air, to fix the mess they got themselves into, which is not really 'free' nor 'out of thin air' but obtained through confiscation.
  9. what's lost is that a global bank, BNP, refuses to make a market in something it sold to its own customers

    the bank is saying the problem is bigger than 2 billion euro and we might as well screw our customers rather than torpedo the bank.....

    this aint good Holmes
  10. MattF


    and the Fed jacked $24B into the US system...

    You can screw the customers though; there will always be more down the block.

    Still though the $hit's hitting the fan in some fashion...and it won't be pretty either way.
    #10     Aug 9, 2007