Eccentric yes, but central bankers are a long way from playboy billionaire geniuses with hidden superpowers…
SO CENTRAL BANKERS still can’t leap tall buildings in a single bound then.
“Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the US economy,” confessed US Fed chairman Ben Bernanke last October. “There’s a limit to what monetary policy can hope to achieve,” agreed the Bank of England’s Mervyn King the following month. “Monetary policy cannot do everything,” sighed the ECB’s Mario Draghi, speaking to the Financial Times in December.
Okay, so these guys are a long way from that “group of remarkable people” brought together by Samuel L.Jackson’s growl “to fight the battles we never could” in the new Marvel Avengers movie. But couldn’t they at least wear their underpants outside their trousers?
“Maintaining price stability and financial system stability are important goals of central banks,” added Bank of Japan boss Masaaki Shirakawa at the start of this year, “but central banks are not able to solve all problems, especially in an economy characterized by zero interest rates and deleveraging.”
Such pessimism surely jars with central banking’s awesome powers. A century ago, before the gamma ray accident, “the Gold Standard determine[d] the money supply,” as Dr.Bernanke told his George Washington students (and anyone who’d listen on the internet) last month. So “there [was] not much scope for the central bank to use monetary policy to stabilize the economy.”