Yellen, Carney or Draghi?
Yellen must be on Steve Bannon's enemy list. She has been central in
continuing and reinflating the neo-liberal framework that almost
collapsed in 2008. The majority of Fed forecasts have proved over
optimistic and their solution has been more of the same medicine (low
rates, QE) while Obama ran up a $9Tn plus deficit bill.
Her four year term ends in Jan 2018. What would her replacement
offer? Well someone needs to pay for tax cuts and infrastructure
spending... and its clearly not going to be regular tax payers.
Osborne's boy outlasted his boss. Having blown up an enormous real
estate bubble in Canada, he was duly brought over to repeat the act,
while Osbourne tried to cut the deficit.
Despite failing to raise interest rates with the UK economy growing,
various lines in the sand being crossed, and numerous Brexit consequence
forecasts being wrong, he is still in the job. One can only assume that
the shrewd, do nothing, politician in Downing Street is retaining him
as a useful pawn to sacrifice when needed.
He did whatever was necessary to keep the EU together, albeit
together and without any structural EU-wide reform, that has ultimately
benefited Germany and her intra-EU labour arb model, while hurting the
social welfare states. The pushback from France and Italy is coming in
the elections, while Martin Schultz, if he wins the German election, is
likely to compromise to keep the EU in tact, question is, will Draghi be
one of the compromises? That said reflation in the EU will require
unorthodox policies and Draghi may be ready and willing.
Perhaps Super Mario will be the only incumbent seeing the next 12 months out.