{"id":20630,"date":"2016-05-16T10:36:41","date_gmt":"2016-05-16T15:36:41","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20630"},"modified":"2016-05-16T10:36:41","modified_gmt":"2016-05-16T15:36:41","slug":"mutiny-among-the-magic-people-india-central-banker-admits-the-ammo-is-almost-gone","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20630","title":{"rendered":"Mutiny Among The “Magic People” – India Central Banker Admits “The Ammo Is Almost Gone”"},"content":{"rendered":"

Mutiny Among The “Magic People” – India Central Banker Admits “The Ammo Is Almost Gone”<\/a><\/h3>\n
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The self-described “magic people”<\/a>\u00a0who “give to the markets” are facing a mutiny this morning as Raghuram Rajan, the head of the Indian central bank, admits central banks and governments of rich countries are\u00a0running out of ammunition for stimulating their economies… but they can never admit as much.<\/strong>\u00a0Crushing the dreams of “extreme monetary policy”-setters, Rajan goes on to discuss the sanity of ‘helicopter money’ warning that people will not be ‘stimulated’ to spend but will question:\u00a0“What kind of world are we in when the central bank prints money and throws it out of the window?”<\/strong><\/em><\/p>\n

Blasphemy!!<\/strong><\/em><\/p>\n

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Mr. Rajan – an outspoke critic of low interest rates in rich countries that can drive hot-money flows to poorer parts of the world – criticised efforts to use fiscal and monetary policy and infrastructure programmes to boost growth rates in advanced economies.\u00a0As The FT reports<\/a>,<\/p>\n

Although Mr Rajan said there were limits on stimulus, he said\u00a0central banks \u201ccannot claim to be out of ammunition because immediately that would create the wrong kind of expectations, so there\u2019s always something up their sleeves\u201d.<\/strong><\/p>\n

Mr Rajan said he was a supporter of stimulus policies to \u201cbalance things out\u201d over short periods when households or companies were proving excessively cautious with their spending.\u00a0But eight years after the financial crisis, we \u201chave to ask ourselves is that the real problem?\u201d.<\/strong><\/p>\n

\u201cI have this image of stimulus as a bridge,\u201d he said. \u201cAs the economy goes down, there is an expectation it will come up.\u00a0Stimulus is a bridge which smoothes over the growth rate of the economy and prevents damaging expectations from building up.<\/strong>\u201d<\/p>\n

If stimulus went on for a long time, if it did not work, he said, the adjustment would be sharp, indicating there was little room for further stimulus.<\/strong><\/u><\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n

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Mutiny Among The “Magic People” – India Central Banker Admits “The Ammo Is Almost Gone” The self-described “magic people”\u00a0who “give to the markets” are facing a mutiny this morning as Raghuram Rajan, the head of the Indian central bank, admits central banks and governments of rich countries are\u00a0running out of ammunition for stimulating their economies… […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[57,124,282,422,452,534,13053,4318],"class_list":["post-20630","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-central-banks","tag-european-central-bank","tag-india","tag-japan","tag-monetary-policy","tag-raghuram-rajan","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20630"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20630\/revisions"}],"predecessor-version":[{"id":20631,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20630\/revisions\/20631"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}