LONDON -- This is a tale of two banks, combined with a large dose of blind faith and credulity.
The two banks are the Bank of Japan and the Federal Reserve of the United States. The blind faith is the very widespread belief that these two institutions, by juggling with short-term interest rates, or through similar devices, can miraculously reverse the forces that are dragging down world stock markets and sending shudders through the global financial community.
The question is how confidence is to be restored. How can we re-create the mysterious "essence" that makes consumers wake up in the morning and want to go and buy things, and businessmen wake up in the morning and want to go out and start new projects, commission new factories, open new offices and shops, or just purchase a new computer or set of office furniture?