There is a certain arrogance that comes with printing money. When you control the supply of a nation’s currency, when your signature sits on every banknote, it is easy to start believing you also control the story. The Bank of England believed this in September 1992. It was wrong. What happened on Black Wednesday was […]
The Day Math Won: Why No Central Bank is Bigger Than the Market Read More »
Most people assume central banks were born from economic theory. That some group of brilliant minds sat in a quiet room, debated monetary policy, and designed institutions to manage the money supply for the good of the people. That is a nice story. It is also mostly wrong. The real origin of central banking is
There is a strange ritual that happens several times a year. The chair of the Federal Reserve walks to a podium, reads a carefully prepared statement, and manages to talk for thirty minutes without saying anything concrete. Reporters then spend the next 48 hours arguing about what was actually said. Markets move billions of dollars
Strategic Ambiguity: Why Central Banks Never Say Exactly What They Mean Read More »
Picture a central bank. You probably imagine something austere. Gray suited officials poring over inflation data. Sober discussions about interest rates. The very essence of financial responsibility. Now picture a hedge fund. You might think of aggressive bets. Risk seeking behavior. The pursuit of returns above all else. The Bank of Japan manages to be
Is the Bank of Japan Actually the World’s Biggest Hedge Fund? Read More »