US Financial World War (Part 5): Nassim Taleb spells it out AGAIN…


Is Bernanke merely implementing a “Nick Leeson strategy” by gambling with the retirement funds of Pensioners and our future generations – socialising debt? I think so and so do plenty of other people better qualified to comment than I.

It is understandable that NNT cannot hide his frustration!

When US should be working toward ensuring robustness [resilience] they are, almost certainly, creating fragility.

 Will this come to be known as the biggest self-serving act in economic history?

Fed don’t “recognise” the non-linearity [dynamic and complex] of global economy

 

On the off chance that someone taking the time to read this blog (thanks) doesn’t already know who NNT is these will give you some clues as to what he is about. He developed ten principles to help make societies more robust to Black Swan events:

1. What is fragile should break early while it is still small. Nothing should ever become Too Big to Fail.

2. No socialisation of losses and privatisation of gains.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks.

5. Counter-balance complexity with simplicity.

6. Do not give children sticks of dynamite, even if they come with a warning.

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”.

8. Do not give an addict more drugs if he has withdrawal pains.

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement.

10. Make an omelette with the broken eggs.

Enhanced by Zemanta

US Financial World War (Part 5): Nassim Taleb spells it out AGAIN…


Is Bernanke merely implementing a “Nick Leeson strategy” by gambling with the retirement funds of Pensioners and our future generations – socialising debt? I think so and so do plenty of other people better qualified to comment than I.

It is understandable that NNT cannot hide his frustration!

When US should be working toward ensuring robustness [resilience] they are, almost certainly, creating fragility.

Will this come to be known as the biggest self-serving act in economic history?

Fed don’t “recognise” the non-linearity [dynamic and complex] of global economy

On the off chance that someone taking the time to read this blog (thanks) doesn’t already know who NNT is these will give you some clues as to what he is about. He developed ten principles to help make societies more robust to Black Swan events:

1. What is fragile should break early while it is still small. Nothing should ever become Too Big to Fail.

2. No socialisation of losses and privatisation of gains.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks.

5. Counter-balance complexity with simplicity.

6. Do not give children sticks of dynamite, even if they come with a warning.

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”.

8. Do not give an addict more drugs if he has withdrawal pains.

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement.

10. Make an omelette with the broken eggs.

U.S. Financial World War: Bernanke defends QE2


I thought that this story may have a bit of life in it! Particularly if you subscribe to the view contained in the original article (Why (and how) the U.S. Has Launched a New Financial World War ) rather than naively go along with what is pushed out from Bernanke and the usual media channels.

Below is the word from the Beeb but I was also very interested to read this piece

The truth is, Quantitative Easing will not reduce unemployment, narrow the output gap, or increase aggregate demand. At best, it will lower long-term interest rates (slightly) and buoy asset prices. That may be good for the stock market, but it won’t lay the groundwork for a strong recovery. In fact, it might not even be enough to keep the economy from slipping back into recession.

BBC News:

Germany, China, Brazil and South Africa have criticised the US plan, with the German Finance Minister Wolfgang Schaeuble saying it was “clueless” and would create “extra problems for the world”.

China’s Central Bank head Zhou Xiaochuan has urged global currency reforms, while South Africa said developing countries would suffer most.

South Africa’s finance minister Pravin Gordhan warned that “developing countries, including South Africa, would bear the brunt of the US decision to open its flood gates without due consideration of the consequences for other nations.”

The US policy “undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis,” he said.

The heads of state and government of the G20 group of the world’s leading nations is due to meet in a week in South Korea, with currencies and trade imbalances high on the agenda.

via BBC News – Fed\’s Bernanke defends new economic recovery plan.