by Mish

The index ranges from -10 (dark blue) to 10 (dark red), where -10 indicates that all countries are easing (as in late 2008) and 10 indicates that all are tightening (as in mid-2006). In generating the Index value at any point in time, each country’s monetary policy stance is weighted by its currency’s share of global foreign exchange reserves. (The United States, therefore, receives a 61 percent weighting.) A country is said to be easing (tightening) policy if has cut (raised) rates in the past three months, or is expected to do so in the next three months. A country is also said to be easing if it is engaged in QE. The line graph below the color-bar shows how the Index has moved over time. On the far right of the graph, future rate-move expectations are used. You can choose whether to see Fed or market expectations.

A feature I would like to see is a history of recent hikes if one hovers over the country, rather than just the current rate. I have passed that idea on.

Mike “Mish” Shedlock


Monetary Schizophrenia: “Citizens’ Rage will be Directed Where it Belongs (At Central Bank)

Societe Generale’s Albert Edwards discusses “Monetary Schizophrenia” in his latest email alert. Here are a few interesting snips.

Mindless Central Bank Lemmings Head Towards Cliff

John Hussman had an interesting post this week on a The Decade of Zero and its Chaotic Unwinding.

Internal Feuding Within the ECB Over Tapering: Reflections on Monetary Policy

At the Fed, the debate is over normalization of the balance sheet. The Fed has already finished tapering.

Bond Market Paralysis: What Happens When Central Banks Own the Market? Mish’s Sure-Fire Proposal

Here’s the question of the day: What happens when central banks own the market? The answer comes from Asia where Japan’s Government Bond Market Grinds to a Halt and the yield on 10-year Japanese bonds did not move for seven days.

Central Banks Puzzled as Global Inflation Hits Lowest Level Since 2009: Solving the Puzzle

Yesterday, I commented on “transitory” factors holding down inflation. Today, the Wall Street Journal reports Global Inflation Hits Lowest Level Since 2009.

Diving Into the IMF’s Global Housing Update: Bubbles and Busts

The IMF’s Global House Price Index, an average of real house prices across 57 monitored countries, continues to climb.

Where’s the Cash?

With the mad scramble of Citigroup (C), Ambac (ABK) , MBIA (MBI) and other corporations to raise cash, and with banks reluctant to even lend to each other overnight, inquiring minds just might be asking Where the Heck Is all the Cash?

New Nothingness: Central Banks are Powerless “They Should Go Away” Steen Jakobsen

In a “Trading Floor” interview, Saxo Bank CIO and chief economist Steen Jakobsen, discusses the role of central banks in the global economy with Saxo Bank’s Michael McKenna.

Central Banks Rethink 2% Inflation Target (In the Wrong Direction of Course)

If Central Banks wanted to make a positive impact on the global economy, they would abolish themselves and let the free market set rates.