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The Silver Age of the Central Banker

The Silver Age of the Central Banker

We all sing along
But the notes are wrong
– Matt & Kim, “Get It” (2015)

The strong do what they will, and the weak suffer what they must.
– Thucydides, “History of the Peloponnesian War” (c. 400 BC)

Xerxes: Come Leonidas, let us reason together. It would be a regrettable waste. It would be nothing short of madness for you, brave king, and your valiant troops to perish. All because of a simple misunderstanding. There is much our cultures could share.
Leonidas: Haven’t you noticed? We’ve been sharing our culture with you all morning.

– “300” (2006)

We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.
– Henry “The Mongoose” Temple, Viscount Palmerston (1784 – 1865)

Rick Grimes: [when he kills Shane] YOU made me do this! Not me! YOU did!
– “The Walking Dead” (2011)

“I should have thought,” said the officer as he visualized the search before him, “I should have thought that a pack of British boys – you’re all British, aren’t you? – would have been able to put up a better show than that – I mean –”
“It was like that at first,” said Ralph, “before things –”
He stopped.
“We were together then –”
– William Golding, “Lord of the Flies” (1954)

For the past six plus years, ever since the Fed launched QE1 in March 2009, we have lived in an era I’ve described as the Golden Age of the Central Banker, where the dominant explanation for why market events occur as they do has been the Narrative of Central Bank Omnipotence. By that I don’t mean that central bankers are actually omnipotent in their ability to control real economic outcomes (far from it), but that most market participants have internalized a faith that central bankers are responsible for all market outcomes.

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Olduvai IV: Courage
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Olduvai II: Exodus
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