Are Central Bankers at the End of Their Rope?: Monetary Policy and the Coming Depression

Are Central Bankers at the End of Their Rope?: Monetary Policy and the Coming Depression

by Dr. Jack Rasmus


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Product Details

ISBN-13: 9780986085390
Publisher: Clarity Press, Incorporated
Publication date: 08/01/2017
Pages: 361
Product dimensions: 5.90(w) x 8.90(h) x 1.10(d)

About the Author

Dr. Jack Rasmus is the author of several books on the USA and global economy, including Systemic Fragility in the Global Economy, 2015; Epic Recession: Prelude to Global Depression, 2010, and Obama's Economy, 2012. He hosts the weekly New York radio show, Alternative Visions, on the Progressive Radio network; is shadow Federal Reserve Bank chair of the 'Green Shadow Cabinet' and economic advisor to the USA Green Party's presidential candidate, Jill Stein. He writes bi-weekly for Latin America's teleSUR TV, for Z magazine, Znet, and other print & electronic publications.

Read an Excerpt

Excerpt from Chapter One

Why Central Banks Are Failing

Central banks are failing because their ability to perform these primary tasks is in decline. The question then is

what are the causes of that decline? What developments and forces in the global economy are disrupting

central banks efforts to carry out their primary tasks? The following is a brief introductory overview of the

key problems and fundamental contradictions with which central banks today are confronted.

a. Globalization and integration rendering central bank targets & tools ineffective

First, there's the problem of the rapid globalization and integration of financial institutions and markets that

emerged in the 1970s and 1980s which has grown ever since. Central banks are basically national economic

institutions. The global financial system is beyond their mandate. Not only that, there is no single central bank

capable of bailing out the global banking system during the next inevitable global financial crash. In 2008 it

didn't even happen. The US Federal Reserve and the Bank of England bailed out their respective banking

systems, providing more than $10 trillion in direct liquidity injections, loans, guarantees, tax reductions and

direct subsidies. The Federal Reserve even provided a loan in the form of a currency swap of $1 trillion to the

European Central Bank and its affiliated national central banks. But the Euro banking system has not been

effectively bailed out to this day. Nor has Japan's. Together both have the equivalent of trillions of dollars in

non-performing bank loans. While China's banks and central bank, the Peoples Bank of China, was not

involved in the 2008 banking crash and subsequent bailout, it almost certainly will be involved in the next

financial crisis. In fact, China's financial system may be at the center of it.

The fact that the financial-banking system today is highly integrated and globalized raises another problem for

central banks. With today's banking system composed not only of traditional commercial banks, but of shadow

banks, hybrid shadow-commercial banks, non-bank companies engaging increasingly in financial investing,

and financial institutions in various new forms serving capital markets in general, no national central bank's

operational tools or policies can control the global money supply or ensure stability in goods and services


The global 21st century financial system is also well beyond the reach of central bank supervision

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