In the aftermath of Friday's market "reassessment" and subsequent surge, when the ECB's "bazooka" was found quite stimulative for risk assets after all (as opposed to the Thursday post-kneejerk reaction) one would think that Goldman which still has a 2,100 year end target on the S&P500, would be delighted.
While the leaders of the Fed and other central banks claim that their extraordinary monetary policies haven't significantly increased inequality, economists with the world's most prestigious financial agency, the Bank of International Settlements - known as "the Central Banks' Central Bank" - just released a report showing otherwise.
BIS notes:
Submitted by Lance Roberts via RealInvestmentAdvice.com,
The Fed’s Got A Problem
The most recent employment report sent the financial market pundits abuzz claiming that the economy was on solid footing with no recession in sight. The problem, for anyone willing to actually look at the data, was the underlying data was mostly disappointing.
It’s literally 1937 all over again.
Many analysts have called for the Fed not to repeat its mistake of 1937.
That mistake?
Raising rates when the economy was already weak. Doing this prolonged the Great Depression.
However, few commentators point out WHY the Fed raised rates in 1937.
The reason?
CPI hit 3.7%.
Notice that by raising rates the Fed kicked off another terrible round of deflation with CPI falling from 3.7% to -2.0% in JUST ONE YEAR.
Fast forward to today. The US’s inflation rate is moving vertical…
2016 has been the year that investors turned bearish on central banks.
Something snapped in the market’s collective psyche when Kuroda went NIRP and things haven’t been the same since. It’s as though everyone suddenly realized just how utterly insane this global monetary experiment has become.