posted June 6, 2019
Central Banks Worldwide Rush to Cut Rates

Central banks are lowering interest rates worldwide, in anticipation of the US Federal Reserve soon to do so, as the global economy continues to weaken.

Both the IMF and World Bank have this past week cut their estimates of economic growth… again. Global oil prices continue to decline (as I predicted earlier this year after prices rose following last year’s 40% collapse). US and Europe factory orders and output are flat. Manufacturing globally is stagnating. (Watch for US jobs, a lagging indicator, likely to soon retreat as well). Emerging market economies are slipping into recession, one by one. Advanced economies like UK and Australia now beginning to contract. Bond prices worldwide are booming as bond (long term) rates fall everywhere due to weakening global economies, dragging down short term rates, as the Fed prepares to ‘catch up’ by cutting its own benchmark rate now lagging behind the real economy.

Can the Fed and other central banks boost the sagging US and global economy? Can European central banks even try–with more than $10 trillion in negative interest rates already, with trillions of dollar equivalent in non-performing bank loans(NPLs)? With trillions $ more in bad bank debt and NPLs in Japan, India and China?

Why the Fed’s official 2% inflation target is, and has always been, a phony target and number. And subsidizing capital markets and incomes always its true target. Why monetary policy and central banks are at the end of their fraying ropes and their imminent rate cutting moves will prove ineffective.

For my discussion of these and related questions about the ineffectiveness of monetary policy approaches to the economy (including the emerging popular notion of modern monetary theory–i.e. ‘QE turned on its head’–listen to my 2-part hour long interview with Radio4All on my 2017 book, ‘Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression’.

    GO TO: (for part 1 of the interview)

http://www.radio4all.net/index.php/program/102429

    GO TO: (for part 2 of the interview)

http://www.radio4all.net/index.php/program/102732

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