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,

The IMF finally had a "duh" moment in what should have been obvious in years ago. The IMF finally realizes that almost zero borrowing costs has encouraged speculation rather than hoped-for pick up in investment.Now, the IMF warns period of ultra-low interest rates poses fresh financial crisis threat.

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.