All Intensive Purposes

Central bankers are an odd breed, somewhere between an international trade union and a fraternal masonic order, intimidating outsiders through a carefully inculcated awe of their unfathomable power and, notwithstanding recent disagreements on dealing with market turbulence, a powerful internal solidarity. Jean-Claude Trichet, now president of the European -Central Bank, was once asked for his view of a frankly eccentric plan by the Bank of Japan to start buying equities to boost the stagnant Japanese economy. "We form a mutual admiration society," he told a gaggle of bemused journalists, tongue imperviously lodged in Gallic cheek, "so whatever the Bank of Japan suggests is necessarily the best way of doing it."

They would regard themselves as something like the Jedi Council - an ascetic elite who, through innate wisdom and arduous training, are entrusted with maintaining order in a galaxy permanently threatened by the dark, swirling chaos of price instability. In reality, as Greenspan makes clear, there is a good element of the Wizard of Oz. The darkest secret of central bankers is that they are generally working from the same data as everyone else.

// posted by t.s. @ 8:36 PM