How’s this for inflation fighting policy moves?

The last thing the world needs now are interest rate rises.

It does need interest rate cuts.

It needs tax cuts for the poorest and significant tax increases for the richest and the exploiters.

It needs QE to fund anti-poverty measures.

Are we trying to decrease or increase inflation here?

But what it does not need is a fantasist who thinks independent central banks ever controlled inflation (which was under control by 1992, which was before this era of central banking began) and ever did so using interest rate rises, for which there is simply no evidence.

No evidence that increasing interest rates controls inflation. Uhnh Hunh.

Inflation is a consequence of real world phenomena, not monetary ones.

Oh, right.

7 thoughts on “How’s this for inflation fighting policy moves?”

  1. I’d at least in part agree with one sentence of this Tim.

    We certainly need a tax on ‘exploiters’ – people employed with taxpayers money whose roles shouldn’t exist like ‘professors’ who are utterly ignorant of the subject they profess to teach – that’s a policy I can get behind squarely.

  2. I’m generally loath to quote Zerohedge, but this article is about right in my view:

    https://www.zerohedge.com/commodities/paradigm-shift-western-media-hasnt-grasped-yet-russian-ruble-relaunched-linked-gold-and

    The Davos crowd and MMT pushers haven’t clocked yet that the era of ‘extend and pretend’ is coming to a close. The over-borrowed, financialised, commodity short west has voted itself a welfare state level of complacent comfort and laziness that it can no longer afford. We’re a little over a month into the Second Cold War. Inflation, supply chain de-globalisation, stock market craziness, the death of moral hazard, energy craziness, cultural craziness, the death of sound money – it’s all going to come and bite us on the arse. Big style.

    The Sage of Ely may think that what we need is more unfunded largesse – but he is mindgarglingly wrong. So what’s new?

  3. Harry Haddock's Ghost

    That article is utter poppycock.

    ‘By offering to buy gold from Russian banks at a fixed price of 5000 rubles per gram, the Bank of Russia has both linked the ruble to gold and, since gold trades in US dollars, set a floor price for the ruble in terms of the US dollar.’

    Aha. Ha ha. Ha ha.

  4. @HHG: I have to agree, I read that ZH article too, and was at a loss as to how the Russian Central Bank offering to buy gold for roubles links the rouble to gold. Now if they were offering gold for roubles, different story…..

    However I think Patricks general point is valid – the clock is ticking on the US dollar’s global reserve status, and fiat currencies in general. There is now a massive incentive for other regional powers to either start or speed up work on creating viable alternative global monetary systems. Its noticeable that Russian and China are slowly a) buying gold and b) slowly reducing US Treasury holdings. I suspect they will reach a point where they are able to launch asset backed currencies. Wouldn’t even have to have much asset backing. Which would you prefer to hold, a currency that represented a small amount of gold per unit, or a dollar that Joe Biden and pals can print at the speed of electrons through a CPU?

  5. Which would you prefer to hold, a currency that represented a small amount of gold per unit, or a dollar that Joe Biden and pals can print at the speed of electrons through a CPU?

    The trick to making a killing selling drugs on the internet is to sell them very cheaply. That way you build up a large clientele. Then one day you steal all the money and scarper.

    Would you invest sizeable amounts of your money in a “gold backed” system run out of Moscow? One that could at any time revise the amount of gold each ruble was worth? Because I would stay the heck away from anything like that.

    There’s a reason Chinese companies still largely deal in US$ — the Yuan is still managed. Do you think the Chinese government is going to back a currency that they don’t have 100% control over?

    The US dollar will retain its position until another more trustworthy takes over. For example, the Swiss Franc. It’s never going to be the ruble, ever.

  6. Chester, trustworthy?
    The Swiss have already marked themselves down as untrustworthy by partaking in the financial sanctions.
    Would you deposit your money in a foreign country with a track record of seizing deposits/ artwork/ personal possessions when that country decdes your country is the new target of the Daily Hate.
    So far in this little farrago, the eeeevil Wussians have a better track record of honouring their financial / trade contracts.
    Although Zerohedge have predicted 15 of the last 2 recessions they are worth considering on this.

  7. “Would you invest sizeable amounts of your money in a “gold backed” system run out of Moscow? One that could at any time revise the amount of gold each ruble was worth?”

    Which is different from ‘The US can print as many dollars as it likes any time it likes’ how exactly? Especially now that it looks like the US will be permanently run by people who have no qualms about printing dollars willy-nilly?

    This is my point – there is coming a time where anything with even a hint of asset backing, even the rouble, even run by the likes of Putin and Xi, will look better than the dollar.

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