(FT) Gavyn Davies—Another year in thrall to the central bankers

Posted by Kendall Harmon

Understanding the developing attitude of the central banks, and the effects of their actions, obviously remains central for investors in all financial assets. The “big picture” for global financial assets, involving very low government bond yields and a gradual shift of risk appetite into credit and equities, is unlikely to change until one of two events takes place.

The first would be a decision by the central bankers themselves that the era of unlimited quantitative easing must end, either because of the risk of inflation and asset price bubbles, or because of concerns about fiscal dominance over the monetary authorities. The second would be a realisation by the markets that further action by the central bankers is irrelevant because they have run out of effective ammunition. Either of these events would probably remove the central prop from the equity bull market which began in March, 2009, but neither seems very likely in 2013.

There is certainly no sign that the central bankers themselves will call a halt to the extension of their balance sheets.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentFederal ReserveThe United States Currency (Dollar etc)Politics in General* International News & CommentaryAmerica/U.S.A.AsiaChinaJapanEurope--European Sovereign Debt Crisis of 2010

0 Comments
Posted December 31, 2012 at 5:15 am [Printer Friendly] [Print w/ comments]
Registered members must log in to comment.




Next entry (above): (NPR) Virtually Anyone Can See The Dead Sea Scrolls Now

Previous entry (below): Washington Redskins defeat Dallas Cowboys to win NFC East title and earn a spot in the playoffs

Return to blog homepage

Return to Mobile view (headlines)