[Marxism] "A very nasty period is soon to be upon us" -- Royal Bank of Scotland

Marvin Gandall marvgandall at videotron.ca
Sun Jun 22 11:33:43 MDT 2008

Fred Feldman writes:

>I don't know what the accuracy record of this institution's predictions
> The statement that "the ECB[European Community Bank] is hell-bent on
> raising
> rates" may indicate that the report is partly aimed at scaring the ECB out
> of it. Even though another Bank of Scotland "expert" warns of "the massive
> credibility chasms down which the Fed and maybe even the ECB will plummet
> when they fail to hike rates in the face of higher inflation."

> www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.ml
> RBS issues global stock and credit crash alert
Their guess about the direction of the markets and the economy is as good as
yours or mine.

Actually the bank seems to be beating the drums for a matching rate hike by
the Fed when the ECB makes its move. Otherwise, the dollar will fall further
and oil and other commodities will shoot higher, and concern about the oil
price and inflation has, for the moment anyway, overtaken the credit squeeze
and a replay of the Great Depression as the focus of concern on Wall and
Lombard streets.

There's no indication they're opposed to an ECB rate increase, but the
article does reflect the uncertainty about whether monetary policy should be
aimed at the inflationary price signals being sent by commodities or the
deflationary ones coming from the housing market.

In general, as you know, financiers are biased against any hint of inflation
and resist loose money policies unless systemic stability is at stake.
Unlike exporters, they're strong dollar types who want to attract foreign
investment and don't like to have their loans repaid in a depreciated

Then again, they might just be talking the markets down because they are
shorting them or looking to scoop up cheaper assets, but I think these days
bankers have the big picture much more in mind.

More information about the Marxism mailing list