Newsgroup: it.economia.borsa
Titolo: Banche centrali e Tassi - occhio ai movimenti in salita...

BIS plays with fire, demands double-barrelled monetary and fiscal tightening
The Bank for International Settlements has warned authorities across the 
developed world that they cannot rely on ultra-low interest rates to cushion 
the blow of austerity measures.
Both fiscal and monetary policy may have to be tightened at the same time 
and 苑efore recovery is entrenched, a chilling possibility for asset 
markets. "Macroeconomic support has its limits," said the bank's annual 
report.
The Swiss-based "bank for central bankers" said ultra-low rates and massive 
fiscal stimulus saved the world from an economic meltdown during the credit 
crisis, but the balance of advantage has since shifted.

"Such powerful measures have strong side-effects, and their dangers are 
becoming apparent. The time has come to ask how they can be phased out," it 
said.
"There are limits to how long monetary policy can remain expansionary. 
Keeping interest rates near zero for too long, with abundant liquidity, 
leads to distortions and creates risks for financial stability. We cannot 
wait for the resumption of strong growth to begin the process of policy 
correction."
The clarion call for higher rates and an end to quantitative easing is 
controversial and pits the BIS against the International Monetary Fund in an 
epochal policy battle. If wrong, the BIS strategy risks pushing the global 
economy into depression.
Dominique Strauss-Kahn, the IMF chief, warned against zealous 
self-flagellation at the G20 summit. "It could be a catastrophe if all the 
countries were tightening, it could totally destroy the recovery."
Gabriel Stein, of Lombard Street Research, said the BIS is playing with 
fire. "Fiscal and monetary tightening were tried in tandem in the early 
1930s and it didn't work then. The BIS ought to know better," he said.
The bank said the US and Europe made the fatal error of holding rates too 
low after the dotcom bust, fearing a slide towards deflation. The effect was 
to fuel asset bubbles and depress credit yields, pressuring lenders to chase 
risk. "Our recent experience with exactly these consequences a mere five 
years ago should make us extremely wary this time around," it said.
The BIS warned that central banks are luring banks into a fresh trap by 
shoring up lenders with cheap access to short-term funding, which is then 
used to buy long-dated bonds at higher yield - the so-called sovereign 
"carry trade". Some have already been caught out badly in Greek debt.
"Financial institutions may underestimate the risk associated with this 
maturity exposure. They might face difficulty rolling over their short-term 
debt. An unexpected tightening of monetary policy might cause serious 
repercussions," it said.
The parallel with post dotcom errors is likely to rile critics. Housing 
markets and banks were robust at the time, whereas the damage now is deeply 
structural in the US, Britain and Europe. Yet the BIS has clearly concluded 
that it is better for indebted economies to take their punishment early 
rather than dragging out the ordeal as in Japan.
On the spending side, the bank called for "immediate front-loaded fiscal 
consolidation" in key industrial states. "Public debt-to-GDP ratios are on 
unsustainable trajectories," rising from 76pc of GDP in 2007 to 100pc in 
2011. The picture is worse than it looks since the crisis has "permanently" 
reduced output, and aging costs are soaring.
Yet fiscal austerity may be less of a drag on recovery than presumed. 
Denmark slashed its primary deficit by 13.4pc of GDP from 1983-1986, yet 
eked out growth of 3.9pc a year. Sweden grew by 3.7pc during its hair-shirt 
episode in the 1990s, Canada by 2.8pc, and Belgium by 2.3pc.
These cases do not tell us what would happen if half the world tightens at 
the same time, feeding on each other. Even so, the BIS data challenges 
Keynesian claims about fiscal stimulus. State spending merely "crowds out" 
private activity.
Besides, governments have no choice. They must retrench to appease the bond 
vigilantes in the new era of sovereign frailty. "A sudden loss in market 
confidence would be far worse," said the BIS.
-- 
Crisi immobiliare italiana e prezzi in discesa per molto..molto.. tempo 
ancora
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