traderdannorcini.blogspot.com / By Trader Dan / Friday, February 1, 2013
Those of you who have been regular readers of this site have seen me use this phrase to describe the Western Central Bankers. I wish to explain this a bit further so you can understand my take on this modern phenomenon.
Back during the Medieval Period, a craft developed which attempted to find a method whereby common, ordinary and PLENTIFUL materials, could be transmuted into something rare, precious and accordingly, valuable. Through various experiments, they took lead, iron and other metals and tried to create a foolproof method for generating untold sums of wealth and thereby prosperity.
We all know that such attempts ended in disappointment/failure but at least we did enhance somewhat our understanding of chemistry and some other earth sciences a bit in the process.
Fast forward to today – what we are witnessing in the Central Bank actions of this last decade is unprecedented as far as its scope but not in its goal when we clear away all the fog and obfuscations involved. The goal of these modern day alchemists remains EXACTLY the SAME as that of the quacks of the Medieval period, namely, the transmutation of common, ordinary and plentiful materials into something of value which will herald in a new era of lasting prosperity.
What I am referring to goes by various names, Quantitative Easing, Bond Buying Programs, Inflation Targeting, etc. but in its essence it is identical. It is no less than the attempt by Central Banks to turn paper into something of value. In this case it is even worse, because it takes DEBT and somehow cosmically turns that into VALUE by declaring it an asset. I cannot think of anything more opposed to sound logic and economic common sense and yet this is where we are at today.