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I can't help of thinking of events in the 1930s when I see the headlines in the financial media these days. One thing is the geopolitical situation - another thing is the new Greek government's attempt to negotiate a new debt deal with the EU.
If monetary policy is credible and strictly rules based who is running the central bank has little importance. However, if the central bank has not established full credibility then who is running the show will actually be important. Therefore, last week’s news that Yutaka Harada has been nominated for Bank of Japan’s board should certainly be noticed.
The new Greek Finance Minister Yanis Varoufakis is all over the international media these day and surprise, surprise he is making a lot more sense than a lot of people (including myself) had feared.
My recent trip to Iceland and my discussions there about the possible future changes to Iceland's monetary regime have inspired me a great deal in terms of organising some of my views on monetary matters in general.
Earlier this week I re-visited Iceland on the invitation of the Icelandic bank Islandsbanki. I had been invited to give a presentation on the topic of "Options for monetary and currency reform in Iceland" after the expected lifting of capital controls.
The ECB's large scale quantitative easing programme already has had some success - initially inflation expectations increased, European stock markets performed nicely and the euro has continued to weaken. This overall means that this effectively is monetary easing and that we should expect it to help nominal spending growth in the euro zone accelerate and thereby also should be expected to curb deflationary pressures.
It is no secret that I for years have been very critical about the ECB’s conduct of monetary policy. In fact I strongly believe that the mess we in Europe still are in mostly is due to monetary policy failure (even though I certainly do not deny Europe's massive structural problems).
I have got a lot of questions about what I think about the Swiss central bank’s (SNB) decision last week to give up its ‘floor’ on EUR/CHF - effectively revaluing the franc by 20% - and I must admit it has been harder to answer than people would think. Not because I in anyway think it was a good decision – I as basically everybody else thinks it was a terrible decision – but because I so far has been unable to understand how what I used to think of as one of the most competent central banks in the world is able to make such an obviously terrible decision.
2014 wasn't exactly a great year for the Russian rouble. However, there is a 'currency', which performed worse than the rouble in 2014...Bitcoin