“STOCKS SLIP AS BERNANKE DISAPPOINTS” (June 8, 2012)
Thus the Financial Times today. Only yesterday, the chairman of the Fed was expected to announce another round of quantitative easing, which made the stockmarkets go wild, but nothing came of it. Not even a veiled hint of it, either. The intrepid investors already have near-zero nominal interest rates, which translate into negative interest rates in real terms in view of rising inflation, and they have had two splendid rounds of quantitative easing already. The good chairman has printed money for them for years, thus only contributing to inflation, but the poor investors are still disappointed. No stomach for risk, let alone uncertainty, left in them. What would they wish, anyway? Free profits? Life-long guarantees of multiplying riches? Alas, investors are not what they used to be. Capitalism has turned into a shrinking violet. Revolutionary no longer, it would have disappointed even old Marx. Sooner or later, he would have been forced to revise his magnum opus, too.