IceCap: Every Fed Chair Has A Plan, Until…
It’s Easy
In the world of knitting, stitching and crocheting; threading the needle is easy. Line-up your thread, needle and a good cup of tea and you’re all set.
In most other worlds – it can be tricky.
If executed perfectly – threading the needle can be rewarding, exhilarating and thrilling all at the same time.
If executed imperfectly – it can end in disaster.
In American football, 49ers quarterback Nick Mullens expertly threaded the football between 4 different Raiders players, landing it perfectly in the hands of his teammate George Kittle, who then galloped 60 yards for a touch down.
That was thrilling.
Sporting a human-wingsuit, Jeff Corlis dove off a 12,000 foot mountain and expertly threaded the needle known as “The Crack” in the Swiss Alps.
That was exhilarating.
Unknown to many, threading the needle is also being attempted in the high stakes game of global finance.
Leaders at the world’s central banks are all trying to steer their domestic economies through a small opening while avoiding the pitfalls created by a lifetime of excessive borrowing and ill-fated policy responses.
In the minds of these financial maestros, they have the tools, the doctorate degrees and the blessings of governments to thread the financial needle.
In an effort to resolve any financial crisis, the world’s central banks have always tried to thread the needle by changing interest rates and/or changing the amount of money in the system.
The central banks and their supporters all claim that only through their actions, was a serious crisis resolved allowing everyone to live happily thereafter.
What the central banks and their supporters do not tell you, is that the actions to save one crisis, have always sowed the seeds for the next crisis.
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