You’re sick. You’ve been sick for several weeks now. You’re long past the “take two aspirin and call me in the morning” protocol. You’re jaundiced, you’re not sleeping well, you’re losing weight, people are asking if you’re ok, the whole deal. You decide to find a doctor. You find four, all in the same office. After conferring together, they tell you this:
Well, we’ve looked over your charts and blood work and we don’t have any idea what’s the matter with you.
We hope you’re not expecting too much from us because we really don’t if we can help.
But we’ll prescribe some medicines for you anyway because that’s what we’ve always done.
Please see the receptionist on the way out to take care of your bill. Have a nice day.
Just how long would it take you to find the front door of their office?
Last week the International Monetary Fund [IMF) held its annual spring meeting where a gaggle of international banker/doctors gathered to analyze the world’s economy. Doctor Number One, Lorenzo Bini Smaghi, the former member of the European Central Bank’s executive board, said to those worthies gathered:
We don’t fully understand what is happening in advanced economies.
Doctor Number Two, Sir Mervyn King, the outgoing governor of the Bank of England, said:
There is the risk of appearing to promise too much or allowing too much to be expected of us.
Doctor Number Three, Janet Yellen, a vice-chairman of the Federal Reserve (and first in line to replace Bernanke next year), said:
In the years before the crisis [the Great Recession], financial stability became a “junior partner” in the monetary policy analysis, in contrast with its traditionally role [of keeping unemployment low and the purchasing power of the dollar stable].
Translation: we didn’t keep unemployment low and we didn’t stabilize the purchasing power of the dollar but, hey, the economy looked just fine anyway so we really didn’t see anything to worry about.
Doctor Number Four, José Viñals, IMF’s head of financial stability, said:
[We’ll continue current policies which are] absolutely necessary [to cure the patient even though] we are in uncharted territory.
I’m not making this up. These are the folks “in charge” and they haven’t a clue what they’re doing but they’re continuing to do it anyway: inflate and talk, or vice versa. That’s all they know.
Don’t you feel better now?