Have Central Bankers Lost Control?
Michael T. Snyder | Jul 07, 2013 02:16AM ET
Are the central banks of the world starting to lose control of the financial markets? Could we be facing a situation where the bond bubble is going to inevitably implode no matter what the central bankers do? For the past several years, the central bankers of the planet have been able to get markets to do exactly what they want them to do. Stock markets have soared to record highs, bond yields have plunged to record lows and investors have literally hung on every word uttered by Federal Reserve Chairman Ben Bernanke and other prominent central bankers. In the United States, it has been remarkable what Bernanke has been able to accomplish. The U.S. government has been indulging in an unprecedented debt binge, the Fed has been wildly printing money, and the real rate of inflation has been hovering a 441 trillion dollar interest rate derivatives time bomb sitting out there that rapidly rising interest rates could set off.
So needless to say, the Federal Reserve is scared to death of what higher interest rates would mean.
But at this point, they may have lost control of the situation.
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