WSJ: Central Bankers Worry Economy Still in Peril

[GliderGuider]

Central Bankers Worry Economy Still in Peril

The mood here in the Grand Tetons, where central bankers and private economists from around the world gather each August, was distinctly gloomy.

The angst was underscored in a blunt speech by the International Monetary Fund's new managing director, Christine Lagarde. "We risk seeing the fragile recovery derailed," she said Saturday. Those risks have been aggravated, she said, by the public's sense that policy makers' response has been inadequate. "We are in a dangerous new phase," the former French finance minister said.

What Ms. Lagarde said publicly, several central bankers expressed privately. The central bankers' problems are compounded by internal divisions and current realities. Several U.S. Federal Reserve officials have doubts about how much more they can do to resuscitate a U.S. recovery that is falling short of Fed expectations. Most European Central Bank officials believe the solutions to Europe's sovereign-debt, governance and banking woes lie with elected leaders, not the ECB.

Economists at JPMorgan, in their weekly reprise of economic developments, blamed the recent global stock selloff on "a sense of policy paralysis in the U.S. and Europe, which has driven home the point that there is no cavalry to ride to the rescue."

So they're finally admitting they are out of bullets. Welcome to the start of The Endless Depression, we hope you enjoy your ride.

[dkf]

1. Actually they are saying the politicians are the ones with the bullets.

Too bad they are playing Russian roulette with their supply.

[GliderGuider]

2. They may be saying that,

but that just amounts to passing the buck so someone else gets blamed when the fabric tears. The political bandoleers are as empty as the financial ones. What remaining bullets the pols have in their guns will be used to shoot each other in the back (or themselves in the foot).

[Taitertots]

3. It would be illegal for the Fed to take the actions the Federal Government should have

The Republicans are the people destroying the economy. Why are you bemoaning the Fed for doing just about everything it is legal for them to do to lessen the damage?

""Unfortunately," economists at IHS Global Insight said this weekend, "the Fed doesn't have any rabbits to pull out of the hat to magically re-ignite economic growth. It is doing what it can (and that will probably mean more quantitative easing at some point), but its prime ammunition has already been used.""