The Central Bank Dilemma
I just read Mohamed El-Erian's piece titled, "Market Calm May Be Short Lived", and started to write a comment response, but then reconsidered and thought that this could be a very interesting, perhaps first ever (?) Seeking Alpha polling opportunity.
Mr. El-Erian's article reflects the theme of his very interesting new book, The Only Game In Town: Central Banks, Instability, and Avoiding the Next Collapse, that the world's central banks and the US Federal Reserve's policy tools are becoming less effective (Hugh Heffner would have said "jaded", but that's not appropriate jargon for high finance discussions). Anyway, El-Erian concludes his article with:
"Moreover, what may follow is far from predestined, depending in large part on whether politicians are able to bring about the much needed hand-off from excessive reliance on central banks to a broader policy response."
My Poll Question
It may not be predestined, but what do you think the probability is of politicians responding with long-term sound fiscal policies - bearing in mind that in today's environment, it is no longer sufficient for even the politicians of one country - or one "union" - to unilaterally act fiscally responsible?
So please respond by commenting to this article by stating an option number (feel free to include insightful comments) of which one you feel is more likely. Note that they are not all directly related to economic policy. I'm asking what global leaders and politicians might be most likely to agree and act on. I included a "write-in candidate" as option #4 because I'm sure that the SA community can come up with some great alternatives that I didn't think of - just please keep responses within the SA editorial guidelines:
- Coordinated global response to fiscal reform
- All oil exporting countries agreeing on output caps (not even rollback quotas!)
- Global coordinated reduction in nuclear weapons proliferation
- <enter your write-in issue here>
I can't wait to see the results!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.