World
Time to Pay (up), Pal
It is also a reminder that 90% of the volumes reported by Wall Street come from electronic trading platforms, a number of which are powered by computer algorithms that perform automated trading, and occasionally lead to massive system errors - one remembers the Knight Capital trade in August 2012 that saw the company losing over $460 million.
That kind of error is problematic but one needs to start considering the mistakes in the light of what stands as actual, official policy these days across the United States, much of Europe and Japan: specifically, the myths being built around quantitative easing (QE) programs.
Remove all the trappings of policy and vastly unproven family of assumptions underpinning QE, and what you are left with is a simple, inescapable truth: the Federal Reserve is simply and randomly crediting bank accounts with vast sums of money in the hopes of re-igniting economic growth.
The QE process is simple; using the US example - the Fed buys off US government securities from the dealer banks, which go into the auction of these bonds knowing full well that they have a buyer behind them. Interestingly, they also make a bit of money in the process, buying the bonds at one price and selling to the Fed at a slightly higher price (lower yield). It is not much on the face of it, but for what is essentially a risk-free activity, they do make a lot of money off the Fed.
Imagine waking up one morning, seeing your monthly bank statement with US$92 quadrillion showing as your account balance. I don't know about you, but it would certainly make my day. In any event, as with all things that look too good to be true, this one too was the result of an administrative error that saw PayPal, the online payment engine that powers E-Bay and a number of other entities around the e-commerce world and increasingly even in the real world, credit the amount into someone's bank statement.
The mere fact that a computer program would be allowed to dispense these sort of amounts seems problematic when one considers that the amount represents $13.17 million for every man, woman and child on this planet. Heck, I would love to wake up to see that number on my bank balance in the morning, leave alone the 92 quadrillion.