The Alchemists: Three Central Bankers and a World on Fire (62 page)

“Who do I call if I want to call Europe?”
:
Vanessa Gera, “Kissinger Says Calling Europe Quote Not Likely His,”
Associated Press
, June 27, 2012.

“Trichet has become the de facto president of Europe”
:
Jeff Black and Jana Randow, “Trichet Turns ‘President of Europe’ as Debt Crisis Stuns Political Leaders,”
Bloomberg News
, August 9, 2011.

“for personal reasons”
:
“Jürgen Stark resigns from his position,” ECB Press release, European Central Bank, Frankfurt, Germany, September 9, 2011, http://www.ecb.int/press/pr/date/2011/html/pr110909.en.html.

“It’s a very bad sign”
:
Jack Ewing and Nicholas Kulish, “Key German Resigns from Leadership of ECB,”
International Herald Tribune,
September 10, 2011, 14.

“The Executive Board of the ECB”
:
Helmut Schmidt, “Farewell event for Jean-Claude Trichet,” speech, European Central Bank, Frankfurt, Germany, October 19, 2011, http://www.ecb.int/events/shared/pdf/speech_schmidt_111019_en.pdf?9e56ea646c3197e7a7b08fa78e70a276.

“The single currency is an ancient idea”
:
Jean-Claude Trichet, speech, European Central Bank, Frankfurt, Germany, October 19, 2011, http://www.ecb.int/press/key/date/2011/html/sp111019.en.html.

They called themselves the Groupe de Francfort
:
“A Crisis? Call the F-Team,”
Economist,
November 4, 2011.

CHAPTER 18: ESCAPE VELOCITY

“I find the activism at the Fed right now a major turnoff”
:
Senate Committee on Banking, Housing, and Urban Affairs, transcript of hearing, July 14, 2011, CQ Transcriptions.

“I would fire him tomorrow”
:
Transcript of September 7, 2011, debate of Republican Presidential Candidates at Ronald Reagan Presidential Libary, Federal News Service.

“The euro-area crisis has had more dramatic moments”
:
Speech by Mervyn King at the Mansion House, June 14, 2012, http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech587.pdf.

“The fact that we’re not in the euro area”
:
Mervyn King, Quarterly Inflation Report Q&A, May 16, 2012, http://www.bankofengland.co.uk/publications/Documents/inflationreport/conf120516.pdf.

King was in the royal box
:
Matt Sandy and Amanda Perthen, “Crisis? What Crisis,”
Mail on Sunday,
July 3, 2011.

“the reason we would raise interest rates”
:
Sean O’Grady, “No Interest Rate Rise before Unemployment Falls, Says King,”
Independent
(London), June 29, 2011.

“almost impossible to calibrate”
:
Bank of England Inflation Report, August 2011, 38, http://www.bankofengland.co.uk/publications/Documents/inflationreport/ir11aug.pdf.

“The big risks facing the UK economy”
:
Mervyn King, Inflation Report Press Conference, Opening Remarks by the Governor, August 10, 2011, http://www.bankofengland.co.uk/publications/Documents/inflationreport/irspnote100811.pdf.

“We were very conscious”
:
Examination of Witnesses, Treasury Select Committee, http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1576/11102502.htm.

“shock and awe”
:
Philip Aldrick, “Shock and Awe Could Be QE’s Biggest Asset,”
Daily Telegraph,
October 7, 2011.

“The world economy has slowed”
:
Allistair Osborne, “Bank Pins Hopes on QE2 to Keep Economy Afloat,”
Daily Telegraph,
October 7, 2011.

“Suppose we faced a very different economic environment”
:
“The Fed’s Dual Mandate Responsibilities and Challenges Facing U.S. Monetary Policy,” September 7, 2011, http://www.chicagofed.org/webpages/publications/speeches/2011/09_07_dual_mandate.cfm.

“Desperate times call for bold measures”
:
Christina D. Romer, “Dear Ben: It’s Time for a Volcker Moment,”
New York Times,
October 30, 2011, 6.

“Is it frustrating”
:
Bank of England Quarterly Inflation Report Q&A, May 16, 2012, http://www.bankofengland.co.uk/publications/Documents/inflationreport/conf120516.pdf.

CHAPTER 19: SUPER MARIO WORLD

“Mario Draghi’s first day at work”
:
“George Papandreou: An All Too Final Stand,”
Guardian,
November 1, 2011, http://www.guardian.co.uk/commentisfree/2011/nov/01/george-papandreou-final-stand-editorial.

“the political equivalent of smashing rare and expensive plates”
:
Joshua Chaffin and Quentin Peel, “Papandreou’s Gambit Sparks Eurozone Alarm,”
Financial Times,
November 2, 2011.

“The referendum in essence is about nothing else”
:
Stefan Simons, “Merkel and Sarkozy Halt Payments to Athens,”
Der Spiegel,
November 3, 2011.

“We made Papandreou . . . aware”
:
Ibid.

“It amounted to the final stage of the ‘waterboarding’ sessions”
:
Carlo Bastasin,
Saving Europe: How National Politics Nearly Destroyed the Euro
(Washington, DC: Brookings Institution Press, 2012), 338.

In the week ending November 11
:
Derived by the author from weekly ECB balance sheet announcements at http://www.ecb.int/press/pr/wfs/2011/html/index.en.html.

They served white wine from the Pfalz region
:
Ralph Atkins, “Eurozone Crisis: A Deft Way to Buy Time,”
Financial Times,
February 7, 2012.

“coordinated actions to enhance their capacity”
:
Federal Reserve Press Release, November 30, 2011, http://www.federalreserve.gov/newsevents/press/monetary/20111130a.htm.

“Finally, global action!”
:
Kevin Carmichael, “Central Banks in Bid to Pull Europe from Doldrums,”
Globe and Mail,
December 1, 2011, B1.

“it was a lively discussion”
:
Mario Draghi, press conference December 8, 2011, http://www.ecb.int/press/pressconf/2011/html/is111208.en.html.

“It felt like war”
:
Niki Kitsantonis and Rachel Donadio, “Athens Shaken by Riots after Vote for Austerity,”
New York Times,
February 14, 2012, A8.

One Greek newspaper
:
“‘Memorandum Macht Frei’: How One Greek Paper Views the Second Bailout,”
Journal,
http://www.thejournal.ie/memorandum-macht-frei-how-one-greek-paper-views-the-second-bailout-351455-Feb2012/.

“must undertake determined policy actions”
:
Hearing at Committee on Economic and Monetary Affairs of the European Parliament, introductory statement by Mario Draghi, April 25, 2012, http://www.ecb.int/press/key/date/2012/html/sp120425.en.html.

“The euro is like a bumblebee”
:
Speech by Mario Draghi, Global Investment Conference, London, July 26, 2012, http://www.ecb.int/press/key/date/2012/html/sp120726.en.html.

CHAPTER 20: GOVERNOR ZHOU’S CHINESE MEDICINE

“A drug from Western medicine”
:
Speech by Zhou Xiaochuan at Caixin Summit, November 5, 2010, official English translation at http://www.pbc.gov.cn:8080/publish/english/955/2010/20101228160916958752023/20101228160916958752023_.html. Author’s translation differs from official translation. Original Chinese at http://www.pbc.gov.cn/publish/hanglingdao/2950/2010/20101119164544386735148/20101119164544386735148_.html.

Forbes
listed Zhou as number fifteen
:
Nicole Perlroth and Michael Noer, “The World’s Most Powerful People,”
Forbes,
November 2, 2011, http://www.forbes.com/powerful-people/.

Foreign Policy
placed him number four
:
“The FP Top 100 Global Thinkers,”
Foreign Policy,
December 2010.

In August 2010, there was a strange rumor circulating
:
Jason Dean, “Markets Ignore China Rumor (for a Change),”
China Realtime Report
(blog),
Wall Street Journal,
August 31, 2010, http://blogs.wsj.com/chinarealtime/2010/08/31/markets-ignore-china-rumor-for-a-change/.

“They had a red rubber stamp”
:
“Carl Walter and Victor Shih on the Chinese Banking System,” Gerson Lehrman Group High Table Video, May 21, 2012, https://www.hightable.com/china/video/video-carl-walter-victor-shih-chinese-banking-pt-1.

“From other countries we’ve already learned this lesson”
:
21st Century Business Herald,
March 6, 2009, http://www.21cbh.com/HTML/2009-3-9/HTML_5DFC2OOESWSQ.html.

“astronomical lending” . . . “masking catastrophe”
:
Ru Guo, [“Wu Xiaoling: Astronomical loans mask catastrophe, central bank must return to hedging measures”], July 23, 2009.

“Besides laboring . . . I was exposed to other things”
:
Chenjing Xu, [“Zhou Xiaochuan: We can’t let the common people’s money become frayed”], [
Global People Magazine
], November 30, 2010, http://people.huanqiu.com/Exclusive/2010-11/1303775_5.html.

“In a complicated system, there are usually many feedback loops”
:
Zhou Xiaochuan, “Changing pro-cycliclality for financial and economic stability,” March 26, 2009, http://www.bis.org/review/r090421b.pdf.

“old-style Maoists”
:
David Barboza, “China’s Mr. Wu Keeps Talking,”
New York Times,
September 26, 2009, http://www.nytimes.com/2009/09/27/business/global/27spy.html?_r=1&pagewanted=all.

“Whatever the market can solve”
:
Chenjing Xu [“We can’t let the common people’s money become frayed.”]

In a doubles match against . . . Larry Summers
:
Bob Davis, “Political Overlords Shackle China’s Monetary Mandarins,”
Wall Street Journal,
April 15, 2011, A1.

China’s bond market is breathtakingly underdeveloped
:
Henry Sanderson, “China Bond Market Ready for Takeoff after Bold Moves,” Bloomberg News, June 11, 2012.

“kind of international reserve currency we need
:
Zhou Xiaochuan. “Reform the International Monetary System,” March 23, 2009, http://www.pbc.gov.cn/publish/english/956/2009/20091229104425550619706/20091229104425550619706_.html.

In October 2009, the PBOC created a new department
:
Tao Li [“PBOC confirms the establishment of a second monetary policy division”], Caixin Media, October 30, 2009, http://www.caijing.com.cn/2009-10-30/110299012.html.

“The main purposes of the swap agreement”
:
“Bilateral Local Currency Swap Arrangement with the People’s Bank of China,” Reserve Bank of Australia, March 22, 2012, http://www.rba.gov.au/media-releases/2012/mr-12-08.html.

In official documents, the phrase used
:
http://www.fx168.com/fx168html/20120514/20120514134396080.htm; http://www.chinascopefinancial.com/news/post/11212.html.

“the will of the market”
:
“RMB internationalization is market’s choice,”
China Daily,
June 5, 2012, http://www.china.org.cn/business/2012-06/05/content_25566200.htm.

“If some areas need to be reformed”
:
“Reform Is a Big Systematic Transformation and Needs Reasonable Arrangements,” Emerging Markets Insight, Mirae Asset, July/August 2012.

“trickery”
:
Peng Yi [“How did Zhou Xiaochuan become a trickster with the interest rate hike”],
Economic Observer,
October 21, 2010, http://www.eeo.com.cn/2010/1021/183192.shtml

AFTERWORD: BACK TO JACKSON

“What about the commercial-paper market?”
:
“Tangled Reins,”
Economist,
September 6, 2007. http://www.economist.com/node/9767718.

“The results that we have do not imply”
:
Michael Woodford, “Methods of Policy Accommodation at the Interest-Rate Lower Bound,” paper presented at the Jackson Hole Symposium “The Changing Policy Landscape,” August 31, 2012, http://www.kansascityfed.org/publicat/sympos/2012/mw.pdf?sm=jh083112-4.

“I never plan my holidays ahead”
:
Mario Draghi, interview with
Le Monde,
July 21, 2012, http://www.ecb.int/press/key/date/2012/html/sp120721.en.html.

“This is a political problem”
:
Brian Blackstone and Marcus Walker, “How ECB Chief Outflanked German Foe in Fight for Euro,”
Wall Street Journal,
October 2, 2012, A1.

At a dinner on August 1
:
Paul Carrel, Noah Barkin, and Annika Breidthardt, “Special Report: Inside Mario Draghi’s Euro Rescue Plan,” Reuters, September 25, 2012.