Central Banks and Markets

On the 30th of September 2007 the “Great Financial Crisis” began. Eight years later the implications are maturing.

The view by central banks that they can manage market conditions have no historical basis. History shows the “financial engineering” measures can be only temporary, the results become increasingly futile and the market corrections produce volatility.

Quantitive easing or electronic “money printing” increases the amount of currency which decreases the currency value already in circulation. That affects the capacity to purchase goods seen as price increases.  The price has not increased in fact the worth of the tendered currency has decreased.

The net result of the US programs has inflated the “Fed’s” balance sheet from $880bn to $4.427tn (thats $4,427,617,000,000,000). That liability is backed by a promise and $50bn in possibly tangible assets. Japan now the worlds third largest economy makes the “Fed” look like amateurs when it comes to “QE” type measures. Add the Eurozone and you should get the “easy money” policy point results in one specific point of risk.

But lets take a look at a snap shot of history of larger financial events;

1901 -04 US crash – Presidential assassination
1907 US crash – Run on US Banks
1913 Federal Reserve formation to avoid “Boom-Bust” crashes
1914 – 18 Global financial crisis due to WW1
1920 – 21 US Crisis
1921 Private ownership of Gold banned in US
1929 – 36 US “Speculative bubble” crash
1937 US Crash
1951 Korean War crash
1962 US “Flash Crash”
1971 Brazilian crash and debt crisis
1973 UK and US crash – Global Oil shock crisis
1974 US abandons Gold backed US$
1982 Kuwait leverage crash – 3rd largest Exchange
1987 US – “Black Monday”
1989 Brazilian crash
1989 US “Leverage buyout of Airlines” crash
1991 – 2011 Japanese – Stock and property “bubble” crash
1992 UK Currency and stock “Black Monday” crash
1997 “Asia Financial Crisis” & Global “mini crash”
1998 “Russian Financial Crisis” –
2000 US “Dot Com” crash
2001 US “9/11” crash
2002 US “down turn” crash
2007 Chinese “global shock” crash
2007 US “property bubble” crash
2008 “Great Financial Crisis”
2009 Dubai “debt deferment” crash
2010 “European Sovereign Debt” crisis
2010 US “Flash Crash”
2011 Global market crash

This list requires updating.