Why International Central Banks Still Hold All the Cards in 2013

Note: If the Central Banks hold all the cards why are we still playing thier game? If we want to End the Federal Reserve we must limit our use of the Federal Reserve note. Please look into Agorism, Alternative currencies, and our own personal solution the Houston Exchange Network.


If the opening salvos of 2013 tell investors anything, it's to keep their eyes fixed on the world's central banks rather than its more volatile politicians or even spluttering economies.

Given the U.S. Federal Reserve's latest musings on Thursday about how long it can safely sustain its current super-easy monetary policy, that's not as unambiguously positive as it proved over the past 18 months.

Just a look at the jump in 10-year Treasuryborrowing rates to 8-month highs early on Friday gives a glimpse into what might happen if dissenting views within the Fed spread when jobless rates ease closer to its now stated target of 6.5 percent.

An unchanged U.S. unemployment rate of 7.8 percent in December may suggest that's a story for another time, but the episode does underline that central bank policy more than any other factor will continue to dominate global markets' direction for the foreseeable future.

Relentless bouts of global monetary support via money printing, bond buying, cheap central bank loans and currency market intervention overwhelmed stock and bond markets everywhere in 2012 to lend a decidedly bullish hue to markets otherwise still riven by fiscal, political and economic stress.

If you'd ignored pretty much everything else last year and bet solely on the determination of the 'Big 4' central banks- the Fed, European Central Bank, Bank of Japan and Bank of England – to doggedly pursue market stability and economic reflation, then you'd have done handsomely.

Put another way, it was simply the hoary old adage of "Don't fight the Fed" – or more accurately, and perhaps more ominously: 'Don't fight the Fed, ECB, BoJ and BoE'.

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