Dr. Mohamed A. El-Erian: What Happens If Central Banks Fail?

[Christians4LessGvt]

the fraud that funds the Leftist Nanny-State is imploding!

El-Erian Breaches The Final Frontier:
What Happens If Central Banks Fail?

April 2012

In the last three plus years, central banks have had little choice but to do the unsustainable in order to sustain the unsustainable until others do the sustainable to restore sustainability!" is how PIMCO's El-Erian introduces the game-theoretic catastrophe that is potentially occurring around us. In a lecture to the St.Louis Fed, the moustachioed maestro of monetary munificence states "let me say right here that the analysis will suggest that central banks can no longer, indeed, should no longer, carry the bulk of the policy burden" and "it is a recognition of the declining effectiveness of central banks tools in countering deleveraging forces amid impediments to growth that dominate the outlook. It is also about the growing risk of collateral damage and unintended circumstances." It appears that we have reached the legitimate point of and the need for much greater debate on whether the benefits of such unusual central bank activism sufficiently justify the costs and risks.

This is not an issue of central banks? desire to do good in a world facing an "unusually uncertain" outlook. Rather, it relates to questions about diminishing returns and the eroding potency of the current policy stances. The question is will investors remain "numb and sedated" by the money sloshing around the system?"

http://www.zerohedge.com/news/el-erian-breaches-final-frontier-what-happens-if-central-banks-fail