Collusion_How Central Bankers Rigged the World Read online

  interventions of, 7, 145

  liquidity instruments of, 170

  money pumped by, 1

  money-conjuring by, 120, 231, 251

  on yen, 137, 152

  G20 countries, 16, 56, 152

  China meeting, 126–127

  global recovery and, 166, 233

  IMF and, 29, 96–97, 190

  jobs and, 222

  policy in, 11

  summits of, 28–29

  wage growth in, 9

  Gabriel, Sigmar, 235

  GDP. See gross domestic product

  Geithner, Timothy, 21, 26, 31

  barbs from, 93

  debt crisis and, 205

  on dollar, 140–141

  meetings with, 38

  yuan policy, 99, 105

  George, Esther, 169, 172, 217, 234, 238

  Germany

  Bundesbank, 13, 208–209, 211, 213, 219, 222

  Deutsche Bank, 3, 208, 242, 243–244

  Draghi on, 236–237, 242–244

  on ECB, 235

  elections in, 244–246, 245

  as partner, 130

  See also Merkel, Angela

  Glass, Carter, 4

  Glass-Steagall Act, 1–2, 253

  gold standard, 9, 104–105, 113, 250, 251

  Goldfajn, Ilan, 83

  Goldman Sachs, 2, 21, 76, 134, 154

  Gonzalez, Mauricio, 17

  Great Crash of 1929, 1

  Greece, 197, 207

  bailout, 195, 200–201, 203, 216–217

  continuing problems in, 216–219

  ECB attack on, 227–228

  euro and, 225

  Lagarde on, 227

  Lew on, 227

  recession in, 193–194

  Greenspan, Alan, 22, 252

  Greenwald, Glenn, 82

  Grexit threat, 227–228

  gross domestic product (GDP)

  of Brazil, 60–61, 74–76, 78

  of China, 129

  currency adjusted, 2

  of EU, 129

  global, 124–125, 128, 249, 252

  held by G3 banks, 249

  of Japan, 13, 151

  of Mexico, 15, 17, 30, 43

  of United States, 192

  Group of Thirty, 18, 108, 182

  Grupo Economistas Asociados, 17

  Guajardo, Ildefonso, 50

  Guo Shuqing, 97

  Hammond, Philip, 243

  Harker, Patrick, 234

  Harper, Stephen, 19

  Haruhiko Kuroda, 133, 149

  as BOJ head, 151–152

  on Brexit, 168

  credibility of, 160, 164

  on economic growth, 166

  as Helicopter Haruhiko, 163

  on inflation, 157

  on monetary policy, 171–172

  on monetary stimulus, 160–161

  money-conjuring of, 152, 156, 178

  on NDB, 158

  on QQR, 154, 156

  Tarō Asō union, 171

  helicopter money, 170–171, 234, 241

  Hirofumi Nakasone, 139

  Hiroshi Nakaso, 151

  Hoenig, Thomas M., 144, 200, 254

  Hollande, François, 214, 215

  hot money, 36–39, 57, 61, 67, 75, 79

  HSBC, 3, 58, 99, 101

  Hu Jintao, 91, 94–95, 99

  Hu Shulion, 129

  Hung, Jochen, 225

  IIF. See Institute of International Finance

  IMF. See International Monetary Fund

  inflation

  BCB target, 58

  BIS on, 231

  in Brazil, 66–69, 76

  in China, 89–90

  in developing nations, 62

  ECB and, 217

  in Eurozone, 219, 243

  Haruhiko Kuroda on, 157

  Mantega and, 67

  Mexico fighting, 20

  Tombini and, 71

  Institute of International Finance (IIF), 24

  Instituto para la Protección del Ahorro Bancario (IPAB), 27

  International Monetary Fund (IMF), 8, 66, 101, 178, 214

  bailout fund, 202

  on Brazil, 74, 78

  Calderón and, 33

  Carstens and, 16, 38, 44

  China and, 93

  developing nations and, 29, 47, 137

  Europe and, 5

  the Fed and, 10–11

  G20 countries and, 29, 96–97, 190

  Lagarde as head, 44, 47, 119, 201, 203

  on misjudgments, 239–240

  Ortiz at, 15

  QE and, 221

  SDRs, 88, 96–98, 116, 121, 123, 129, 250

  Short-Term Liquidity Facility, 27

  World Economic Outlook released by, 118, 231

  on world financial conditions, 231–232

  on yuan’s parity, 117

  investor-state dispute settlement (ISDS), 176

  IOF. See Credit, Exchange and Insurance Tax

  IPAB. See Instituto para la Protección del Ahorro Bancario

  ISDS. See investor-state dispute settlement

  Italian Central Bank, 192

  Itaú Unibanco Bank, 58, 64, 65, 83

  Japan

  alliance shift in, 175–176

  collusion in, 12–13

  creative money making in, 160–164

  earthquake affecting, 144–148, 198–199

  economic shifting in, 141–144

  elections and stimulus in, 149–152

  EU and, 179

  the Fed and, 159–160

  fresh opportunities for, 11

  GDP, 13, 151

  independent conjurers in, 155–159

  money-conjuring by, 133–179

  negative rates in, 164–175

  overview, 133–134

  point of no return for, 134–138

  QE and, 133–134

  recovery in, 148–149

  Russia and, 175

  stability in, 152–155

  Trump and, 176–179

  in worsening world, 138–141

  Jiang Zemin, 87–88

  JPMorgan Chase, 2–3, 18, 21, 99, 134, 183–184, 253–254

  Jun Azumi, 147–148

  Juncker, Jean-Claude, 229

  Kamath, K. V., 116

  Kamin, Steven, 205–206

  Kauder, Volker, 211

  Kazbekov, Vladimir, 116

  Kikuo Iwata, 151

  King, Mervyn, 142

  Kissinger, Henry, 88

  Knight, Malcolm, 17

  Kocherlakota, Narayana, 172

  Koichi Hamada, 163

  Koji Takami, 135

  Kumiko Okazaki, 175

  Kushner, Jared, 52

  Lagarde, Christine, 10, 11, 154, 202, 228

  on Bitcoin, 251

  on Brexit, 239

  Carstens competition, 28–29, 38

  China visit, 102

  on currency wars, 152

  on Greece, 227

  as IMF head, 44, 47, 119, 201, 203

  Zhou Xiaochuan and, 102, 122–123

  Lautenschläger, Sabine, 226

  Lehman Brothers, 21, 56, 90–91, 138

  Levy, Joaquim, 71, 73–75, 77

  Lew, Jack, 108, 111–113, 121, 125, 127

  on Brexit, 239

  on ensuring stability, 243

  on Greece, 227

  on philosophical differences, 222

  on stagnation, 224

  on structural reforms, 166

  warning from, 156

  on yen, 161

  Li Keqiang, 107–108, 116, 119, 123, 124

  Lin Zhouyan, 79

  Lipsky, John, 25, 101

  Lockhart, Dennis, 152

  long-term refinancing operation (LTRO), 220, 233

  Lou Jiwei, 108

  LTRO. See long-term refinancing operation

  Lula da Silva, Luiz Inácio, 53, 57, 61

  graft conviction, 86

  investigations of, 79–80

  loan from, 97

  on politics, 82

  on rate hikes, 55�
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  on Rousseff, 76

  Ma Jun, 118

  Ma Kai, 108

  Maastricht Treaty, 185, 194, 211, 236

  Mankiw, Greg, 220

  Mantega, Guido, 55–56, 61, 100, 148, 202

  capital controls and, 62–63, 66

  currency wars coined by, 60

  dismissal of, 71

  inflation and, 67

  on Meirelles, 59

  on private banks, 64

  on stopping contagion, 103

  Masaaki Shirakawa, 133, 141, 195

  as BOJ head, 135–136

  on dollar, 137

  on economic growth, 136

  on economic outlook, 143

  on Great Depression, 138

  QE and, 138, 151

  resignation of, 150–151

  Masaru Hayami, 133–134

  May, Theresa, 241, 244

  MBSs. See mortgage-backed securities

  Medina Mora, Manuel, 43

  medium-term lending facility (MLF), 125

  Medvedev, Dmitry, 109, 116

  Meirelles, Henrique, 24, 62, 173

  announcement by, 16–17

  asking for independence, 55

  BCB and, 53

  becoming dove, 85–86

  on failed creative economic policies, 70

  firing of, 61

  Mantega on, 59

  money-conjuring by, 54, 70

  rate reductions and, 57–58

  return of, 82–85

  SELIC and, 57

  working of, 56

  memorandum of understanding (MOU), 116

  Mendes, Gilmar, 80

  Merkel, Angela, 13, 188, 194, 246

  on Brexit, 229

  on euro, 145, 202–203

  on the Fed, 191

  on rates, 215

  Mexico, 8

  bailout, 28

  beginning of US economic collaboration, 16–19

  Brazil competition, 45

  Carstens ascension in, 35–36

  cheap money in, 28, 43

  credit squeezes and bailouts in, 20–22

  currency swaps with, 26, 42

  dollar and, 30–31

  domestic conundrum in, 11–12

  the Fed concern over, 26–27

  fighting inflation, 20

  as follower, 43–46

  foreign money and currency wars in, 36–37

  four fateful days in, 22–25

  GDP, 15, 17, 30, 43

  growth and new president in, 39–41

  history repeating self in, 27–28

  hot money in, 37–39

  Obama and, 31–34

  ongoing US economic collaboration, 30

  Ortiz exit in, 34–35

  overview, 15–16

  poverty rise in, 23

  rate raises and, 46–48

  seeking solutions, 41–43

  status quo battles and, 28–30

  Trump and, 12, 51–52

  United States trade, 48–49

  wall and, 49–51

  See also Banco de México

  Mitsubishi UFJ, 142, 144, 168

  MLF. See medium-term lending facility

  money, types of

  artificial, 7, 51, 247, 249

  easy, 66, 141, 208, 213, 231, 245

  helicopter, 170–171, 234, 241

  hot, 36–39, 57, 61, 67, 75, 79

  pumped, 1, 37, 47, 110, 114, 139, 155–156, 183, 241, 245

  See also cheap money

  money-conjuring, 1, 13–14, 17, 46, 47, 66

  alternative to, 234

  banks fortified by, 196

  by Bernanke, 193

  by BOJ, 133, 139, 143, 149, 159, 175

  in Brazil, 62–63

  Brexit and, 238–242

  by central banks, 98, 212, 241

  in China, 111

  collusion with, 87

  by Draghi, 245–246

  by ECB, 98, 175, 196, 205

  era of, 218

  by the Fed, 15, 31, 54, 88–89, 98, 114, 117, 139, 175, 254

  by G7 banks, 120, 231, 251

  growth and, 183, 221

  of Haruhiko Kuroda, 152, 156, 178

  by Japan, 133–179

  by Meirelles, 54, 70

  by PBOC, 110

  projects funded by, 173

  as scheme, 5

  social issues and, 157

  by Tombini, 71

  in United States, 254

  world of, 26, 89

  Monti, Mario, 202

  Morgan Stanley, 2, 142

  mortgage-backed securities (MBSs), 183

  MOU. See memorandum of understanding

  Nabiullina, Elvira, 116

  NAFTA. See North American Free Trade Agreement

  Naoto Kan, 143

  NDB. See New Development Bank

  negative interest rate policy (NIRP), 13, 63

  Neves, Aécio, 70

  New Development Bank (NDB), 81

  China and, 120–126

  developing nations and, 115–116

  Haruhiko Kuroda on, 158

  opening of, 116, 250

  New Developmentalism, 81–82

  Newton, Isaac, 3, 253

  Nikkei stock index, 118, 136–137, 143–144, 151–152, 157–158

  NIRP. See negative interest rate policy

  Nissan, 149

  Nixon, Richard, 90

  Nobuteru Ishihara, 173

  Nogueira Batista, Paulo, 116

  North American Free Trade Agreement (NAFTA), 15, 19, 26–27, 51, 52

  North Korea, 130, 254

  Noyer, Christian, 47

  Obama, Barack, 40, 41, 51, 146, 153, 205

  on China, 93

  Hu Jintao meeting, 99

  Mexico and, 31–34

  reelection of, 149

  on supranational reserve currency, 96

  tariffs and, 109

  OECD. See Organisation for Economic Co-operation and Development

  Operation Car Wash, 79–80, 83

  Operation Twist, 115

  Organisation for Economic Co-operation and Development (OECD), 9, 36, 197

  Ortiz, Guillermo, 11

  Bernanke meeting, 23–25

  as BIS head, 32

  as bulldog administrator, 15–16

  on credit freezes, 17

  on emerging markets, 30

  exit of, 34–35

  at IMF, 15

  rate cuts by, 32

  rate-hikes by, 20

  on touching bottom, 33

  US dollars announcement, 22–23

  US ties of, 18

  at World Economic Forum, 16

  Osborne, George, 229

  panic behavior, 31

  Panic of 1907, 4

  Papademos, Lucas, 190–191, 193, 204

  Papandreou, Andreas, 195, 203

  Paulson, Henry, 18, 21, 24, 53–54, 55, 186

  on China, 90–91

  on exchange rates, 90

  PBOC. See People’s Bank of China

  Pena Nieto, Enrique, 40–41, 51

  People’s Bank of China (PBOC), 8, 12, 126

  BOJ alliance, 175–176

  currency swaps, 110, 112, 154, 175–176, 218

  dual rate decision of, 98

  intervention by, 115

  liquidity tools of, 125

  money pumping by, 114

  money-conjuring by, 110

  North Korea and, 130

  rates cut by, 88–89, 91–92, 104, 105–106, 114, 120, 210

  rates raised by, 90, 100–101, 109, 128–129

  RRR in, 64–65, 88

  Tripartite Bank Governor’s Meeting, 97, 140

  yuan and, 105, 174

  Zhou Xiaochuan as head, 87–88, 108, 120

  peso

  Brexit and, 49

  depreciation of, 21–23, 50

  performance of, 233

  protecting, 48

  rise of, 31–32

  speculation on, 26

  Petrobras, 72–73, 75, 77

  Pettis, Michael
, 124

  PIIGS countries, 101, 194

  pledged supplementary lending (PSL), 125

  Poiré, Alejandro, 49

  Portugal, Murilo, 64, 66

  Provopoulos, George, 195

  PSL. See pledged supplementary lending

  public sector purchase program (PSPP), 226

  Putin, Vladimir, 112, 115, 129, 175

  QE. See quantitative easing

  quantitative and qualitative easing (QQE), 12, 152, 154, 156, 163

  quantitative easing (QE)

  addiction to, 249

  benefits of, 167

  Bernanke and, 110, 147

  by BOJ, 138, 159–160

  defined, 1–2

  Draghi and, 225–226, 245

  ECB and, 188–193, 208, 221

  expansion, in Europe, 230–238

  by the Fed, 42, 46, 63, 67, 81, 95, 100, 106–107, 115, 143, 146, 159–160, 211–212, 224

  IMF and, 221

  infinity, 14

  Japan and, 133–134

  Masaaki Shirakawa and, 138, 151

  no-limit, 193–198

  risks of, 135

  Stiglitz on, 252

  Rajoy, Mariano, 206

  Rakoff, Jed, 72

  Ramos, Alberto, 67, 84

  rates

  of Banco de México, 31–32, 41, 46–47, 49, 51–52

  of BCB, 69, 75–76

  of BOE, 187, 240

  of BOJ, 119, 137, 164–175, 210

  central banks and, 252

  of ECB, 37, 169, 187, 189, 198–199, 201, 210, 220–222, 230, 233–234

  of the Fed, 22, 37, 46–48, 51, 117, 137, 138, 165, 176

  FOMC on, 240

  in Japan, 164–175

  Lula da Silva on, 55–56

  Meirelles and, 57–58

  Merkel on, 215

  Mexico and, 46–48

  NIRP, 13, 63

  Ortiz and, 20, 32

  Paulson on, 90

  of PBOC, 88–92, 98, 100–101, 104–106, 109, 114, 120, 128–129, 210

  Tombini and, 67

  Yellen on, 172

  Zhou Xiaochuan on, 110, 112

  ZIRP, 56–57, 63, 67, 155–156, 164, 202

  RCEP. See Regional Comprehensive Economic Partnership

  real, 58, 60–61, 64, 66–72, 75, 83

  reducing reserve requirements (RRR), 64–65, 88

  Regional Comprehensive Economic Partnership (RCEP), 50, 128, 177, 250

  renminbi (RMB), 90, 98, 116, 119–120, 125, 176, 218

  SDRs and, 250

  World bank on, 200

  See also yuan

  Romer, Christina, 220

  Romer, Paul, 135

  Romney, Mitt, 41, 108

  Roth, Jean-Pierre, 32

  Rousseff, Dilma, 57, 62

  austerity policies of, 73–75

  call to private banks, 65

  criticism of, 70

  demonstrations against, 68

  election of, 61, 63

  errors of, 86

  impeachment of, 77, 82, 84

  Lula da Silva on, 76

  at Petrobras, 72, 75

  platform promises of, 69

  reelection of, 71

  RRR. See reducing reserve requirements

  ruble, 112, 115, 231, 233

  Russia, 5–6, 148, 231

  BRICS meeting in, 97

  China and, 99, 103, 111–117, 174

  Japan and, 175

  Ryan, Paul, 207

  Samaras, Antonis, 210