Watts Witit

TOKYO, March 9 (Reuters) – The Bank of Japan is
expected to keep monetary policy steady at its policy-setting
meeting next week, according to sources familiar with the
central banks thinking.

With share prices on the rise and the yen weakening since
last months monetary easing by the central bank, it likely sees
little reason to offer additional monetary stimulus to an
economy showing growing signs of recovery, according to the
sources, who spoke on condition of anonymity.

Also, with prospects rising for Greece to avert a debt
default, the BOJ is seen standing pat barring a sharp turn of
events in Europe or disappointment in US payrolls data big
enough to jolt financial markets. The US data is due out at
1330 GMT on Friday.

The BOJ holds a two-day review of monetary policy next
Monday and Tuesday.

International Monetary Fund (IMF) Managing Director Christine Lagarde holds a news briefing at the IMF headquarters in Washington, DC on July 6, 2011. UPI/Kevin Dietsch

Fundamental Forecast
for British Pound:
Neutral

• GBPUSD: Looking for Short
  Entry Setup

• GBPUSD
  Support is Under 15800

• Sterling Extends Loss
  after NIERS Says UK GDP Grew 0.1% in Feb Quarter

The British Pound pared the sharp selloff
from Friday to maintain the range carried over from the previous
month, and the sterling should continue to track sideways in the
following week as market participants weigh the outlook for
monetary policy. Indeed the Bank of England refrained from
releasing a policy statement after the central bank kept the
benchmark interest rate at 0.50% while maintain its asset
purchase program at GBP 325B, and we may see the GBPUSD works its
way back towards the top of the range as the exchange rate
continues to hold above the February low (1.5644).

As market participants look forward to the
BoE Minutes due out on March 21, the range-bound price action
could ultimately lead to another run at 1.6000, but we may see
the sterling struggle to hold its ground next week as the
economic docket is expected to highlight a slowing recovery for
the UK Indeed, fears of a double-dip recession may resurface
amid the ongoing weakness in the labor market paired with the
slowdown in global trade, and we may see the British Pound
quickly give back the advance from earlier this year as currency
traders see scope for more quantitative easing in 2012. As the
fundamental outlook for Britain remains clouded with high
uncertainty, the policy statement could foreshadow a growing rift
within the Monetary Policy Committee, but we may see Governor
Mervyn King scale back his dovish tone for monetary policy as BoE
officials talk down the risk of undershooting the 2% target for
inflation. As BoE officials expect to see a stronger recovery
later this year, the MPC may see scope to conclude its easing
cycle in 2012, and the central bank may lay the foundation to
start normalizing monetary policy in the following year as growth
and inflation picks up.

As the GBPUSD clears the 50-Day SMA (1.5677),
a slew of dismal developments coming out of the UK could spark
a bearish breakdown in the exchange rate, and we may see the pair
work its way back towards the 50.0% Fibonacci retracement from
the 2009 low to high around 1.5300 as it searches for support.
However, as long as the February low (1.5644) holds up, we should
see the pair track sideways ahead of the BoE Minutes, and we may
see the sterling move against its major counterparts should the
central bank talk down speculation for additional asset
purchases. DS

In an unusually blunt and frank speech, Dallas Fed President Richard Fisher told Wall Street it has become “hooked on the monetary morphine” the Fed delivered during the financial crisis.  Fisher said delivering QE3 would be the equivalent of medical malpractice, while telling Congress and President Obama to get their act together, emulate Texas and Mexico, and spark job creation once again.

It is rare to see a Fed President, who happens to also be a member of the FOMC, be so straightforward regarding his views.  Fisher did exactly that.  He bashed the political establishment and Wall Street, telling them to put money back into the real economy to foster growth.  From his speech:

I am personally perplexed by the continued preoccupation, bordering upon fetish, that Wall Street exhibits regarding the potential for further monetary accommodation–the so-called QE3, or third round of quantitative easing. The Federal Reserve has over $1.6 trillion of US Treasury securities and almost $848 billion in mortgage-backed securities on its balance sheet. When we purchased those securities, we injected money into the system. Most of that money and more has accumulated on the sidelines: More than $1.5 trillion in excess reserves sit on deposit at the 12 Federal Reserve banks, including the Dallas Fed, for which we pay private banks a measly 25 basis points in interest. A copious amount is being harbored by nondepository financial institutions, and another $2 trillion is sitting in the cash coffers of nonfinancial businesses.

Fisher, who according to ZeroHedge owns $1 million in gold via GLD and $250,000 in physical platinum, told firms not to bank on further QE.  The Dallas Fed President warned that an addiction to monetary morphine is dangerous, adding that if data continues to improve, albeit at a very modest pace, “markets should begin to preparing themselves for the good Dr. Fed to wean them from their dependency rather than administer further dosage.”  Banks like Bank of America, Citi, and Wells Fargo have rallied as of late, in part due to speculation that the Fed will continue injecting easy money into the economy.

It is rare to see a member of the rate-setting FOMC be so outspoken about the future of monetary policy. Fed Chairman Ben Bernanke has been very careful with his language as of late, neither denying nor confirming that the Fed is considering further easing.  When, in Congressional testimony, Bernanke failed to indicate further easing, though, markets plummeted, with gold and equities leading the decline.

Fisher’s frankness contrasts with that of Bernanke.  The Dallas Fed chief blasted Democrats and Republicans, accusing them of failing their nation “by not budgeting ways to cover the costs of their munificent spending with adequate revenue streams.”

Slightly arrogant, Fisher said he knows what hes talking about given his “firms’ record of substantially outperforming the equity and fixed-income indexes over a prolonged period.”  He also told policymakers to do emulate Texas and Mexico, which boast better job-creating and macroeconomic policymaking records than the US as a whole.

Things won’t change, says Fisher, “until Congress, working with the executive branch, does the responsible thing and pulls together a tax, spending and regulatory program that will induce businesses to step on the accelerator and engage the transmission mechanism of job creation so they and the consumers they create through employment can drive our economy forward.”

How to Understand the Monetary System Currencies / Fiat Currency
Mar 08, 2012 – 12:13 PM

By: GoldSilver

The reason the global monetary system survives is largely thanks to the publics blissful ignorance of exactly how it works. To paraphrase one familiar analogy, if you knew how sausage was made, would you still eat it? Its probably safe to say that the vast majority of the worlds citizens have no clue that the integrity of the currency they work for, save and use as a medium of exchange every day rests on nothing more tangible than their respective governments authority to and solemn promise to tax them in the future.

MADISON COUNTY
Kentuckians take care of one another, and Madison County residents are no exception to the rule. We live in a compassionate and caring Commonwealth, and it goes against our nature to stand back and watch as our families, friends, and neighbors struggle in the aftermath of a natural disaster.

We can be grateful we live in such a community of people willing to help right away. The media has been full of reports of generous outpouring of donations to the people affected by the recent tornadoes. Collections of clothing, food, and other items have been organized to be sent to various hard-hit areas of our state, and beyond.

However, many of the donated items cannot be utilized just yet.

The Madison County Emergency Management Agency (EMA) has received Donation Management information from the Kentucky Emergency Management Agency giving guidance to local communities as they seek to provide relief to their fellow Kentuckians.

At this still early point in the recovery process, monetary donations are needed most.

Food and clothing are not needed at this time. There is no facility in which to store items or from which to distribute them. Items will take up vital space in shelters, and require too many volunteer hours to sort and store.

From a report from KYEM Region 11 Response Manager Steve Oglesby, donations of food are not yet needed in eastern Kentucky. The Salvation Army, Southern Baptist Convention, and other Volunteer Organizations Active in Disaster are on scene and are providing meals.

Individuals, groups, or organizations which have collected items to send to areas affected by the tornadoes are asked to hold or store the items temporarily until they can be efficiently used in the recovery process.

Before sending donations, please check with the following points of contact:

Kentucky Emergency Management at www.kyem.ky.gov. Click the donations and donations and volunteer tab to the right of the page.

Red Cross local contact: Coy Prichard, 623-1336, or visit www.redcross.org. To safely donate, text Red Cross to 90999 to donate $10 for Kentucky Cares. You may also help by texting Storm 80888 to make a $10 contribution to the relief effort. The donation will appear on your next phone bill. To donate via phone: 1-800-red-cros (1-800-733-2767). To give in person, visit any Central Bank or Kroger locations.

Salvation Army local contacts Mark and Sally Love, 624-5826. You may also visit www.disaster.SalvationArmyUSA.org or call 1-800-SAL-ARMY (1-800-725-2769).

Kentucky Baptist Convention local contacts Albert and Bonnie Spencer, 1-800-266-6477 or www.kybaptist.org/dr.

United Methodist Church (UMCOR) local contact(s) Berea United Methodist Church, Skip Little; Richmond First United Methodist Church, Charlene Stone, www.kyumc.org.

Madison County EMA will share more information as it becomes available.

Kelley McBride is a spokesperson for the Madison County Emergency Management Agency in Richmond.

Feb. 29 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke testifies before the House Financial Services Committee in Washington about the US unemployment rate.
(This is an excerpt from the hearing. Source: Bloomberg)

Germanys monetary doyen slams ECBs shocking balance sheet

The doyen of German monetarism has denounced the stimulus policies of the
European Central Bank as a dangerous leap into the unknown, giving voice to
growing misgivings among the German policy elite.

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WASHINGTON (AFP) – The International Monetary Fund’s executive board moved toward a fundamental restructuring of voting rights that will give more clout to emerging economies like China and Brazil, a source close to the board told AFP.

The board agreed on the outlines of a new structure for setting voting power and contributions in the Washington-based lender that will recognize the rise of the emerging economies in the global economy, the source said.

The reform still has to be defined precisely and put down on paper, but the scope of accord on the restructuring – which would likely diminish Europe’s powerful role at the Fund – suggests the details could be sorted out quickly.

A Fund spokesman contacted by AFP confirmed that the board discussed the issue, but declined to comment on any details of the talks.

According to the source, the reform proposal advanced by Brazil’s IMF director Paulo Nogueira Batista was received favorably by the most important directors on the board.

The proposed reform comes as the IMF is seeking to boost its resources for crisis intervention by some $500 billion.

While Europe will be a major part of this, the lion’s share is expected to come from the cash-rich emerging economies – Brazil, China, India, Russia, South Africa, known as the BRICS, and others.

But they have shown reticence, saying both that they want a greater say in the Fund and that they are concerned over how the money might be directed toward troubled Europe.

Brazil, one of the key rising economic powers, has tied its possible contribution to reforms of the Fund’s power structure.

Brazilian President Dilma Rousseff reiterated that point on a visit to Hanover, Germany on Wednesday.

”Since the Cannes G20 summit (in November 2011), we have said that we have agreed to take part in boosting the resources of the International Monetary Fund,” she said.

However, she added, this must go hand in hand with ”a reinforcement of the participation of emerging countries” in the top echelons of the IMF.

For decades, the Fund has been dominated by the United States, Europe and, to a lesser extent Japan, the largest donors and shareholders.

But that arrangement has left the BRICS sometimes less influential than much smaller economies.

For instance, Belgium currently has a larger quota than Brazil, the world’s sixth-largest economy.