Thursday, January 30, 2014

When Central Bankers can't get along

While some people in the world are busy working on trying to bring the world together using a single global currency, others are concerned that we don't seem to get along any more. India Central Bank Governor Rajan feels the FED isn't cooperting these days. If these guys aren't getting along, that indicates stress in the system. 

Here is the link:

A few quotes:

Rajan, a former chief economist at the International Monetary Fund, called for greater cooperation among policy makers weeks before finance chiefs from the world’s top developed and emerging markets gather in Sydney. The Fed’s Jan. 29 statement made no mention of developing economies.
“International monetary cooperation has broken down,” Rajan, 50, said yesterday in an interview in Mumbai with Bloomberg TV India, noting how emerging markets helped pull the global economy out of crisis starting in late 2008. “Industrial countries have to play a part in restoring that, and they can’t at this point wash their hands off and say we’ll do what we need to and you do the adjustment.”
“Fortunately the IMF has stopped giving this as its mantra, but you hear from the industrial countries: We’ll do what we have to do, the markets will adjust and you can decide what you want to do,” Rajan said. “We need better cooperation and unfortunately that’s not been forthcoming so far.”

added comment by me: On the one hand we hear those in global financial institutions talk of lofty goals of bringing the world together to solve all these tough problems. But when push comes to shove in the real world, it seems they are quite ready to go their separate ways. Stress does that. And we always have to keep an eye out for monetary system change that comes from sudden, uncontrolled events when cooperation is not in place. 

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