A Quote by Toshihiko Fukui
Japan's experience suggests the importance of assessing the sustainability of price stability over a fairly long period, which many central banks have emphasized in recent years.
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It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less. [I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with 'free banking.' The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.
Banks have come to realize in the recent crisis that they are paying the price for having designed compensation packages which provide incentives that are not, in the long run, in the interests of the banks themselves, and I would like to think that would change.
I was in business for 30 years, and my experience is that the best way to operate is to work fairly and closely with partners over a long period of time.
The idea that when people see prices falling they will stop buying those cheaper goods or cheaper food does not make much sense. And aiming for 2 percent inflation every year means that after a decade prices are more than 25 percent higher and the price level doubles every generation. That is not price stability, yet they call it price stability. I just do not understand central banks wanting a little inflation.
When you own gold you're fighting every central bank in the world. That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that's why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.
Yes, when they're buying there are more buyers in the market and that's supportive of the price. The more buyers you have, the firmer the price is going to be. When central banks were selling it was a headwind the market had to overcome. Now it's a tailwind that central banks are joining the buyers.
Central banks are choosing to increase their gold holdings as a percentage of total reserves. They obviously think there is a reason to do that. It doesn't make sense to back up one currency with a hoard of other paper currencies. There needs to be a real anchor there. I think that central banks are well behind the curve. If you look at the percentage of above-ground gold controlled by central banks, it's historically low. Hence the fact that central banks are trying to increase their holdings. They've got a long way to go to get where they need to be.
To say that we're going to end countries or eradicate terrorism, and that it's a long war over many years, with many different instruments, suggests a much more complex and drawn-out conflict for which, I think, most Americans aren't prepared.
Japan's future prospects depend on ensuring fiscal sustainability over the long term.
After a long period in which the desired direction for inflation was always downward, the industrialized world's central banks must today try to avoid major changes in the inflation rate in either direction.
We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K.
Global central banks are working hard to lift their economies through an aggressively easy monetary policy. The ECB [European Central Bank] and BOJ [Bank of Japan] are buying tens of billions of bonds and other financial securities each month in an effort to stimulate their economies, which is pushing down rates everywhere, including in the U.S.
Achieving price stability is not only important in itself, it is also central to attaining the Federal Reserve's other mandate objectives of maximum sustainable employment and moderate long-term interest rates.
Adolescence is a relatively recent thing in human history -- a period of years between the constraints of childhood and the responsibilities of adulthood. This irresponsible period of adolescence is artificially extended by long years of education, much of it wasted on frivolities. Tenure extends adolescence even further for teachers and professors.
I think the market should reward banks that have been transparent in recognising their problems. I think the tendency of banks to hide the problem assets over a period of three or four years should not be allowed.
This document will play an important role in protecting the strategic interests of Russia and Uzbekistan and ensuring stability and security in the region, which some politicians call Russia's soft underbelly. It's not a secret that after the Soviet collapse and especially in recent years, Central Asia has become the focus of interest of major nations because of its geographic location and rich mineral resources.
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