Both the ECB and the BOE have maintained their record-low rate policies today, despite the "strong" economy that is pushing Global Markets to daily new highs. For the Bank of England, this is year 6 of monetrary stimulus, which means there are 30 year-old brokers out there who have never traded in an Economy that wasn't supported by a Central Bank.
Not only is GS alumni Mark Carney keeping rates at 0.5% in the midst of a real estate bubble that has tripled the price of London housing, but today they announce they will immediately reinvest funds from the asset-purchase facility that matures tomorrow – so not even a winding down (taper) is in sight. Carney says there’s “no rush” to remove the emergency stimulus put in place by his predecessor Mervyn King, even after the strongest expansion since 2007 pushed unemployment toward the 7 percent level at which officials had said they’d consider a rate increase.
A rational person may wonder how strong does the economy have to be before it's no longer necessary to subsidize the top 1% by giving them free access to money for unlimited amounts of time. Fortunately, most rational people have gotten out of the market by now, and aren't around to bother the Central Banksters with their silly questions…
IN PROGRESS
You must login to see all of Phil's posts. To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.
To signup for a free trial membership, click here.
