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Let's see some amazing facts about this online giant.
Amid
harsh discussions about FED’s new-type of bond buying, new concerns aroused on
the Bank of England’s unusual monetary policy. As Jo Owenwrites:
“After
buying £325 billion of debt from the market, the public sector (the Treasury)
is paying interest to itself (the BofE) on debt that it owes to itself. It
makes no sense for the public sector to owe itself money.”
The two famous Economist.com
blogs host interesting discussions on the topic. Buttonwoodsarguesthat this uncovers monetary repression
of the central bank. Commercial banks need bonds issued by the central bank for
beefing up their capital and liquidity ratios and furthermore, it serves as a
life vest in odd times when commercial banks need the lender of last resort.
Share of state bodies in bond markets are increasing contrary to decreasing
share of private sector which is the probably lowest since 1970. In her comment
on Bloomberg Carmen Reinhart closelyfocusedon this:
“That,
too, was a period of rising oil, gold and commodity prices, negative real
interest rates, currency turmoil and, eventually, higher inflation.”
Another
blog from Economist –Free
exchange, recommends different point of view. It suggests to see “a
temporary bout of money-financed fiscal policy” as Milton Friedman’s
“helicopter drop” of money. When the policy rate is near zero and can’t be
reduced, for the sake of boosting the economy this kind of measures can be taken,
of course temporarily-argues the blog.
Federal Reserve considers buying new type of bond-buying in order to subdue worries about future inflation. The aim of the program is to neutralize fears stemmed from the possibility that FED money printing to aid recovery may fuel inflation. The Wall Street journal reports that the plan will progress according to the following scenario: FED will print money to buy long-term mortgage or Treasury bonds, but immediately will borrow back the money for short-periods at low rates. But there are many critics against this “sterilized” quantitative easing. For instance Jim Grant describes the new policy as “manipulation the value of the currency”. He mentions that repressing interest rates puts the economy on more risky position. Grant’s take can be categorized under three items:
·Unintended Consequences could be harmful & Unbalanced
·FED should learn from 1920-1921 Depression
·U.S. Policymakers are Prolonging Symptoms of Recession
Maria Bartiromo: “What are the alternatives?”
Jim Grant: “Capitalism! Capitalism is an alternative to what we have now. I highly recommend it.”
Facebook is expected to trade its shares on May 18 of 2012. Despite of huge global turbulence in global stock markets, chaos in euro zone economies, Facebook's offering is heavily oversubscribed. But there are still some doubts about the company's ability to expand its online advertisement. Some experts suggests that Facebook should develop other formats for online ads system. 
