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"Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world" - Henry Kissinger

and yet...

"Sooner or later everyone sits down to a banquet of consequences" – Robert Louis Stevenson

The ECB has lost the plot

In response to an FT article by Wolfang Münchau on 13th March 2016, entitled 'The European Central Bank has lost the plot on inflation'

"After all, what the markets expect to happen is entirely in the control of the ECB"

Not on this planet it isn't Mr. Münchau. Not any more. That ‘control’, which has always been a ‘con’, changed in January when US markets tanked. It changed in Japan a few weeks later when Mr. Kuroda wanted the Nikkei to go up and the yen to go down and got the total opposite. It happened the previous time Mr. Draghi did ‘whatever it takes – the sequel’, and again last week when the euro went down, then up again with volatility that might be considered ‘normal’…for a junior gold mining stock.

So when you say: ‘Mr. Draghi and his colleagues retort that their monetary policy is working’.

In what world is failure to achieve any of your objectives year after year classed as 'working'? And working for whom? 

If you’re running a business how much of last week's madness helped you make intelligent decisions? If you were a CFO hedging volatility via the FX markets, how was it for you? Of course, it isn't meant to be 'working' for businesses, or savers, or unemployed people, or indeed anyone with a real job or anyone looking for one. It is meant to be working for banks which would be insolvent if their 'assets' were marked to market, governments that would be 'insolvent' without a printing press, and clueless CBs who if people knew just how utterly out of their depth they are - would be out on their ear, or in the case of the senior ones, scuttling back to their desks at Goldman Sachs or dusting off their mortar boards in order to teach garbage to the next generation of 'spreadsheet wizards'.

Never mind inflation - the ECB has lost the plot on just about all of it Mr. Münchau - except in how to keep your job after years of failure to achieve any of the results for which you were hired.

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