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2012-08-29

John Plender, Jackson Hole in Wyoming

Oracular statements by the mandarins of the global financial system will be subjected later this week to forensic examination by analysts, investors and business people searching for confirmation that policy will be further relaxed by resort to non-standard measures such as quantitative easing.
 

Yet it is hard to see how the meeting can do anything other than confirm the limits of what central bankers can do in today’s dismal global economic circumstances other than buy a bit more time.
 

The backdrop is one of huge uncertainty wherever we look. 

If the current fiscal logjam in the US is not broken after the election in November, policy under current legislation will tighten by 4-5 per cent of gross domestic product in January, which has very aptly been dubbed the fiscal cliff.

Nobody can be sure how policy will develop in China after the change of regime this autumn.
 

In the eurozone the one thing everyone can be sure about is that there will be no conclusive solutions to the problems of this flawed monetary union within a timescale capable of rescuing southern Europe from its slump.
 

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