How central banks have assumed a new primary function, no longer just ‘lender of last resort’ (bank bailout) but ‘permanent subsidization of the private banking system’ in the post-2008 period, when central bank monetary policy has become primary and austerity the policy for government spending. Dr. Rasmus reviews the 5 main themes of his just released book, ‘Central Bankers at the End of Their Ropes: Monetary Policy and the Next Depression’ and explains why Fed and other central banks’ now raising interest rates and planning to sell off their balance sheet debt will precipitate another crisis if rates are raised much further or sell-offs are substantial. Central banks today confront a ‘Great Contradiction’.
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SHOW ANNOUNCEMENT:
Dr. Rasmus explains how the global capitalist economy entered a new phase of evolution with the 2008-09 global financial crash and recession, and how central banks have become the primary economic policy institution for the advanced economies. Central banks have been transformed since 2008 from institutions designed to bail out the private banks in periods of crises, into institutions that permanently subsidize the capitalist banking system by means of constant, massive liquidity injections to the private banks, shadow banks, and their investors. About $15 trillion in central bank liquidity has been provided by means of QE alone, and capitalist banking has become addicted to, and chronically dependent upon, central banks’ free money. Rasmus notes corporate debt has not been removed but only transferred to central banks’ balance sheets, and the global financial and real economy remains fragile and in the late phase of a real growth cycles that are now ending. Rasmus explains the ‘Great Contradiction’ of central bank monetary policy, as the only policy game in town, is that the subsidization of the banking system since 2008 is providing the conditions for the next financial crisis of that system. The 5 major themes of his just released book, ‘Central Bankers at the End of Their Ropes?: Monetary Policy and the Next Depression”, Clarity Press, July 2017, are reviewed. For more book information, go to: http://www.claritypress.com/RasmusIII.html
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