Fed has no plans to help Europe, Dudley says (Reuters)

WASHINGTON (Reuters) - Unconventional monetary policy poses a small risk to central bank independence but a far larger threat comes from fiscal authorities if they insist on policies that harm the economy, a senior U.S.

Originally posted at The Prudent Investor blog,

SINCE fairly early last year, it has been clear that a number of European countries would need to embark on serious austerity plans. What didn't necessary need to follow, but what has in fact materialised, is a sweeping tide of austerity across the continent. Tightening has found its way to places like Britain and Germany, despite a healthy market appetite for British and German debt.

Gold edged up on Thursday, as bargain hunters showed buying interest and gold was particularly strong in euro terms after data from Europe confirmed the continent remains very vulnerable to economic shocks. The euro area recession deepened and data showed that the euro area economy shrank the most since 2009 and its three biggest economies, Germany, France and Italy, suffered slumping output.

The Mole submits: US stocks swung between gains and losses on hump day as Germany and France discussed assistance for Greece, offsetting Federal Reserve Chairman Ben S. Bernanke’s plan to raise the discount rate for loans to banks “before long.” Trading volumes are slowing due to snow storms in the US Northeast. Five of the last seven full trading sessions have seen triple-digit point moves in the Dow.