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moral suasion

Suasion, Sure, But Is It Really Moral?

By |2021-01-13T18:07:43-05:00January 13th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One of the concepts educators sort of snuck into the curriculum was something they called “moral suasion.” This term has meanings outside of Economics, but within the discipline it refers to one key element to the monetary policies of central banks. Basically, persuading markets or economic groups to act in the way officials want using rhetoric or threats without having [...]

A Monetary Low Point, Even By Recent Standards

By |2014-02-18T17:35:43-05:00February 18th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Whether it has been the American version or that pioneered by the Bank of Japan, QE is first and foremost an experiment in psychological manipulation. All central banks derive most of their “authority” from moral suasion, that old textbook “axiom” of getting market participants to act in the manner in which you only threaten. QE is different in that it [...]

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