The day after Lehman Brothers failed, the FOMC gathered to discuss how to conduct monetary business in the wake of the turbulence that decision created. Every single participant was willing to roll the dice on standing pat for two very big reasons. First, they felt that had been aggressive enough to counteract any downside, and that being aggressive in that [...]
It may come as a surprise to some, but that is exactly the sentiment that central banks have been expressing for years; decades even. The economists at the Federal Reserve, ECB, BoE, BoJ and elsewhere see themselves as scientists, the equivalent of nuclear engineers sitting inside the control room of a nuclear reactor. They have gauges and math telling them [...]
Despite the obvious disinterest from pretty much everyone in the media, I still find tremendous relevance and value in the 2008 FOMC. The entire year was spent in a comedy of errors that should make even the most ardent monetarist shameful. This is not to say that I would have preferred more diligent and swift action on the part of [...]
As late as September 2008, the FOMC’s primary concern remained inflation. There were caveats and characterizations abounding through the conversation, but each time they kept coming back to uncomfortably high inflation and the extrapolations of that through their models. The old Philips Curve dies hard, and even with the financial turmoil already rotting through the entire edifice, policy discussion was [...]
Ask and ye shall receive. Only a few days after noting how curious it was that the 2008 FOMC meeting transcripts had not yet been posted, today they arrived. Unfortunately for me, it means I will be stuck reading through (yet again) the arrogant slop of all-too-comfortable monetary mystics. At the September 16, 2008, FOMC meeting, the day after Lehman’s [...]
Gold has not behaved like money in decades, rather gold is, for the most of the world, an investment class. We may not like such a development (it is one of the most insidious actions intentionally undertaken by central banks, including Basel rules) but gold is a liability on a bank’s balance sheet complete with a greater-than-zero risk-weighting. That means [...]
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