Stephen GentleOne really big thing I want to see in my lifetime - the mainstream acceptance that the central bank *simply cannot* fix inflation by raising rates.
It’s utter lunacy and it hurts millions of people. And it just doesn’t work.
mike805@stephengentle They have to consider the cause not just the symptom.
If the inflation is caused by too-easy credit then sure, raising rates will slow it down.
But if the inflation is caused by a physical shortage of gasoline, then no financial manipulation will fix it. Giving out more money in that case will make it worse, as the extra money bids on the same amount of fuel.
The USA made that mistake in the 70s.