The World's Central Banks Are Losing Their Power To Save The Markets From A Crash

Photo: Arrangement of various world currencies including Chinese Yuan, Japanese Yen, US Dollar, Euro, British Pound, Swiss Franc are pictured in Warsaw January 26, 2011. REUTERS/KACPER PEMPEL

The Guardian: Central banks can’t save the markets from a crash. They shouldn’t even try

Alarming data from China was met with a soothing hint about monetary policy. But treasuries cannot keep pumping cheap credit into a series of asset bubbles.

Like children clinging to their parents, stock market traders turned to their central banks last week as they sought protection from the frightening economic figures coming out of China. Surely, they asked, the central banks would ward off the approaching bogeymen, as they had so many times since the 2008 crash.

The US Federal Reserve came up with the goods. William Dudley, president of the bank’s New York branch, hinted that the interest rate rise many had expected next month was likely to be delayed.

A signal that borrowing costs would remain at rock bottom was all it took. After Black Monday and Wobbly Tuesday, the markets recovered to regain almost all their recent losses.

WNU Editor: We all know that a crash is going to happen one day .... the key question that remains unanswered is when.

Update: Hmmmm .... the Islamic State wants to speed up this disaster .... Islamic State Plotting ‘Second Blow’ to U.S. Financial System in Bid to ‘Purify the Earth of Corruption’ (The Blaze).