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By Chan Akya
“News reports confirm that a two-seater Cessna aircraft crashed into the local cemetery near Washington this morning. Police on the scene have uncovered 100 bodies so far and expect to find many more."
Yes, that certainly is an awful joke; but it well typifies the unintended consequences of actions undertaken by the world's central banks from the past few days. In no particular order, we had the following major developments this week:
1. Egged on by the act of the Federal Reserve buying up US Treasury bonds, the Treasury unveiled its very popular but completely brain-dead proposal for a public-private initiative aimed at removing loans and securities sitting on the moribund balance sheets of US banks.
2. The president of the European Central Bank (ECB), Jean Claude Trichet, rejected demands for an increase in stimulus spending in Europe, a point of contention with the Barack Obama administration.
3. Bank of England governor Mervyn King warned that inflation could worsen in the United Kingdom and require a sharp increase in interest rates thereafter.
4. The governor of the People's Bank of China (PBoC), Zhou Xiaochuan, called for a replacement of the US dollar as the global reserve currency.
Asia Times Online :: Asian news and current affairs
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