This headline appeared on the MarketWatch site.
BEIJING (Caixin Online) — The monetary policies of major economies are diverging for the first time since 2008. The euro zone, Britain and Japan are sustaining quantitative easing, while the United States, China and other major emerging economies are on a tightening path.
Here is the most recent chart from the Federal Reserve Bank of St. Louis. This is the adjusted monetary base over the past 12 months. This reflects the monetary policy of the Federal Reserve. The Federal Reserve is in control of the monetary base.
Perhaps we should look at the longer-range policy. Do you see any change since 2009?
The MarketWatch writer draws a conclusion from this “tightening.” He writes: “The Fed’s tightening is primarily to prevent a full-blown asset bubble. Its burst could bring another financial crisis.” But if the FED is not tightening, what happens to the asset bubble?
We are also told that the Eurozone is experiencing quantitative easing (monetary inflation). Does this chart from Cumberland Associates indicate quantitative easing or quantitative tightening?
Tightening, you say? Well, then, maybe you should write for MarketWatch, because you can distinguish up from down.