“THE ERODING POWER OF CENTRAL BANKS” (April 17, 2014)
Thus Der Spiegel today. “Since the financial crisis, central banks have slashed interest rates, purchased vast quantities of sovereign bonds, and bailed out banks,” explains the newspaper. “Now, though, their influence appears to be on the wane with measures producing paltry results. Do they still have control?” A good question, this. So, why not ask central bankers themselves? According to the article, which includes interviews with a number of them, they are doing their best not to say much about the future. Whenever they are forced to come up with a few words, they make sure that they are as ambiguous as the occasion permits. Listening to what central bankers have to say is thus very like listening to Delphic oracles. Federal Reserve’s Ben Bernanke was a master of the ancient art. Mario Draghi of the European Central Bank is currently the best at it, but Janet Yellen is catching up after a bumpy start following Bernanke’s departure a short while ago. By the way, all the other oracles in Greece—Dodona, Trophonios, Claros, and Didyma—were equally famous for ambiguity. Similarly, all the other central bankers are of the same ilk when it comes to pervasive ambiguity. To wit, whatever happens to central banks, do not ask central bankers about it. And the article in Der Spiegel is the proof of futility of such an exercise.