Dec 13, 2007
The Helicopters Start to Drop Money
"The central bank helicopters are planning a co-ordinated drop of liquidity on troubled market waters. The money to be dropped now is not that large. But if this does not work, more will surely follow. The helicopters will fly again and again and again."
These are not the words of Ron Paul or some other advocate of the gold standard. They are the words with which Martin Wolf, associate editor and chief economics commentator at the Financial Times, begins his article describing the concerted action by the Fed, the European Central Bank, the Bank of England, and the central banks of Canada and Switzerland to extend loans to banks, a move that was announced Wednesday.
Wolf concludes:"So does the action by the central banks give us good reason to stop worrying? Only if you like huge rescue operations of incompetent bankers, would be my answer. They may well get the markets back into order. They may, in this way, rescue economies from the threat of recessions. But that is not the end of the story. The bigger the rescue has to be today, the more stringent regulation of financial institutons will have to be in future."
Is Federal Reserve Governor Randall S. Kroszner listening?
These are not the words of Ron Paul or some other advocate of the gold standard. They are the words with which Martin Wolf, associate editor and chief economics commentator at the Financial Times, begins his article describing the concerted action by the Fed, the European Central Bank, the Bank of England, and the central banks of Canada and Switzerland to extend loans to banks, a move that was announced Wednesday.
Wolf concludes:"So does the action by the central banks give us good reason to stop worrying? Only if you like huge rescue operations of incompetent bankers, would be my answer. They may well get the markets back into order. They may, in this way, rescue economies from the threat of recessions. But that is not the end of the story. The bigger the rescue has to be today, the more stringent regulation of financial institutons will have to be in future."
Is Federal Reserve Governor Randall S. Kroszner listening?