Did the “central bank for world central banks” really say this?
The Bank for International Settlements (B.I.S.) has just issued a report saying two things that are remarkable. First, it admits that financial bubbles are blowing up around the world, which the US Fed and other central banks have denied. The B.I.S. didn’t directly blame the central banks for the bubbles, but the inference was clear.
Even more remarkably, the B.I.S. said that deflation is not the monster that Janet Yellen and other central bankers say it is. The report notes that Switzerland has done well for some time with mild deflation. It didn’t say, but it is worth noting, that there is no evidence for the Yellen position. Severe deflation is a result of depression, not its cause. Yet US monetary policy today is all about “avoiding deflation.”
Now if Janet Yellen would just pay attention to some basic facts and logic. But she won’t.