Bill Fleckenstein: When Central Bankers Get Nervous, Watch Out !

• When bankers get nervous, watch out! 
  By Bill_Fleckenstein, http://www.msn.com/ 
  As economies worldwide weaken, the pressure is rising on the world’s central bankers for dramatic action that will ultimately do more damage. When that happens, the gold rally is on.
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  World stock markets remained under pressure over the last week due to the ongoing dysfunction in Europe and — not to be underestimated — the fact that the world economy is slowing down dramatically (which should not come as a shock to anyone who reads this column).
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  I think at this point it is worth discussing the worldwide response by central banks to this macro-deterioration. As my longtime readers know, I have absolutely no respect for any of the idiots who run central banks. They are always wrong. Repeat: they are always wrong.
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  Do you believe in global waning?
  For the last six to 12 months, they have all felt that their individual economies were stronger than they were. And no central bank has been more off the mark, or guilty of making more mistakes, than our own Federal Reserve.
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  It is so incompetent that, in addition to spawning two gargantuan financial bubbles and the ensuing consequent dislocations, it is not even capable of understanding that when you have the warmest weather in more than 100 years, it skews the seasonally adjusted data. Thus, they were all patting themselves on the back this winter while I and others were pointing out that seasonal data were drastically boosted by the weather.
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  Now the underlying economic weakness can no longer be debated, and of course it is exacerbated by the uncertainty and chaos revolving around European government debt and the implications for Europe’s financial system.
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  Recently, the Fed has sent signals that it is getting ready to do more easing of the money supply (beyond extending Operation Twist), and many other central banks have taken steps toward easier money as well. (We’ve seen this from China, Brazil, the European Central Bank and the Bank of England). 
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  read more!

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