Monday, July 30, 2012

The Central Bank Olympics

While the eyes of many are focused on the Olympics going on in London, the sport of totalitarians, central bank money printing, will be on stage later this week, both in the United States and in Europe.

The Fed's monetary policy open market committee is scheduled to meet this Tuesday and Wednesday, with a policy statement to be issued on Wednesday at 2:30 ET.

Although monetary policy is not expected to be eased by FOMC members at this meeting, there is a slight possibility that the members may choose to lower the interest rate on excess reserves, in an attempt to nudge banks into loaning more money out---which could result in monetary growth.

On Thursday, in Europe, the monetary policy making members of the European Central Bank will meet, followed by a policy statement, and a press conference held by Draghi.

Since Draghi has recently stated that the ECB will take the steps necessary to maintain the eurozone, it will be important to see whether he follows up his words with actual money printing.

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