Thursday, March 28, 2013
HUIS CLOS: NOW PLAYING AT THE GLOBAL THEATER:
Ben Bernanke, Mario Draghi, Mark Carney and Li Lihui are sitting in a room with no doors and no windows.
They each have one currency.
Each currency is different.
Their mission is to keep their currency from appreciating.
They each have two tools:
1) print ever greater quantities to weaken the currency to buy up all of their own ever increasing debt burdens and:
2) jawboning about improving conditions and the support for strong currencies.
They can only communicate to each other through policy statements.
They can never leave the room.
They can never let their currency appreciate.
They must continually print greater and greater quantities.
There is no exit strategy.
There is no exit.