In principle, the modern central bank has only one function: to monetize the ever-increasing national debt of socialist states and thus keep the credit cycle alive. You can safely forget all the fuss about stability criteria, inflation targets etc. when it comes to helping the political buddies out of the shit once again. The representatives of the European Central Bank recently declared the fight against inflation a victory in order to be able to lower key interest rates and provide more liquidity just in time for the middle of the year. In principle, the aim is to be able to keep adding new government bonds to the balance sheet; the interest rate hype surrounding this is just window dressing. Inflation figures of the individual eurozone members have by no means reached the desired target, they are rising in the wake of the massive liquidity jumps in Asia, commodity inflation, the geopolitical crises and the high sovereign debt in Europe.
By the way: these are the official inflation numbers. And anybody who still needs to pay for his life by himself knows that they simply are made up.
I didn't know they were cutting rates. Is that official or just projected at this point?
no, it's not official. but they have been spreading the word through their vice presidents via all the media for several days that the interest rate move will probably have to take place in June.
Canada seems to be on a path for June as well. Which means the US will likely wait until fall.
In recent years, Canada has unfortunately moved closer to the policies of the European Union in such a way that its monetary policy has also become a disaster - and I feel very sorry for this beautiful country
Definitely.
I suppose that inflation will now increase even more due to the rise in the price of a barrel of oil.
But there are hidden deflationary forces at work, too. Think if the recession in Europe
Do you think then that the deflationary forces will win out over the inflationary ones?
that is the question of all questions! i think macroeconomists are arguing about this very question at its core, no matter what topic they are talking about, it is ultimately about this. fundamentally, the fiat system is of course an inflationary one. but that doesn't mean that the irritations caused by the ongoing interventions and market manipulations can't lead to deflationary shocks again and again. honestly, i can't answer this question for you in the short term.
I knew it would be difficult to answer this matter because surely they don't even know how to fix this whole mess, but once again, thank you for your continued daily analyses, they help a lot, at least to me.
Thank You, that's kind of You
What is reflation?
This is the deliberate inflation of price bubbles through monetary policy.
Have you heard Tom Luongo's thesis, that Powell is doing this to break European banks' ability to create eurodollars? And he has only been able to do so over the last few years because SOFR has replaced LIBOR for all US private debt.
Nice. I’ve posted a snippet of this into nostr; more people should benefit from your insights.
Cool. Thank You and have a nice day