by Jeff Berwick
In today’s communist-style, centrally planned world, when big central bankers meet and make decisions, no matter how small, markets quake and currencies shake. And that’s what just happened.
Bankers at both the Federal Reserve and the Bank of Japan met in the last 12 hours to decide where they would take monetary policy next. But when they sat down to make decisions, they were faced with a classic prisoner’s dilemma: Options were precluded. There was a lot they wanted to do but little they could do.
Both the Fed and the Bank of Japan (BoJ) and the European Central Bank (ECB) as well, want to debase their respective currencies. But each wants the other to take the plunge first.
The Fed has been the least reluctant to announce easing in the past. And even Wednesday, after moving toward a tightening stance, the Fed remains vocal about potential loosening. The ECB and BoJ are more circumspect.