Dec. 2 (Bloomberg) -- Australia’s central bank cut its benchmark interest rate by one percentage point, extending the biggest round of reductions since the nation was last in a recession in 1991.This is good news for me (i am long and doubled up earlier today) and for the Aussies. Let's hope the BOE and ECB do the same thing Thursday. The Central Banks need to press ahead aggresively and not in a pansy ass way. Historically money added to the system has an emotional impact for a day or so but the real impact takes 6 to 12 months to actually begin to have broad effects in the economy. Thus the earliest we should see any effects from all the money injections and easy credit moves is late February to March of 09. Until then all these banks need to press forward. Once some sign that money is starting to move through the economy again they can begin to plan for dealing with the inflationary impact of all the credit stimulus. What they must not do is be tentative. They keep firing till asset prices stabilize and the fear goes away.
update: My position didn't make a nickel. Must be that efficient market thing the academics are always going on about.
No comments:
Post a Comment