What if we all decided to ignore the central banks?
Granted, they have provided material for this blog non-stop from the day it started. They keep financial journalists, economists, analysts, pundits and other financial fortune tellers employed. They keep the stock market pumped up when it can’t achieve new records of its own merit. They appear be the only people in the world tasked with managing the economy (even if they are mismanaging it, rather than managing it).
So why should we ignore them?
They’re frequently wrong. The Federal Reserve Board, our country’s central bank, has a history of causing, not solving crises. Former Fed Chair Alan Greenspan is not even mentioned in “The Big Short,” but some give him top blame for causing the 2007 housing bubble and the financial crisis that followed.
“Alan Greenspan will go down in history as the person most responsible for the enormous economic damage caused by the housing bubble and the subsequent collapse of the market,” according to The Guardian.
Noting the plunging housing prices and high unemployment in 2013, when the article was written, The Guardian reported that, “The horror story could have easily been prevented had there been intelligent life at the Federal Reserve Board in the years when the housing bubble was growing to ever more dangerous proportions (2002-2006). But the Fed did nothing to curb the bubble. Arguably, it even acted to foster its growth with Greenspan cheering the development of exotic mortgages and completely ignoring its regulatory responsibilities.”