The Current Inflation Target – Bank of England
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The Current Inflation Target and Rationale
2 responses to “The Current Inflation Target and Rationale”
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When one says “inflation is not price-rises-in-the-shops it is a rise in the money supply” establishment types either look baffled – or come up with the following reply…..
“But M3 is not rising – if anything bank credit is in decline….”
They fail to see that the Bank of England producing more money (from nothing) to try and prop up the bank credit-money bubble (M3) just prolongs the agony.
Of course a deflationary collapse would cause terrible suffering – but this endless support of the bubble will just not work.
It is like Japan – and I am not even thinking of modern times.
After the First World War credit money bubble burst the Japanese authorities (unlike the American Administration of Warren Harding) refused to let the bubble burst.
They did everything they could to prop up the cartel of banks and the enterprises that depended on the banks.
But eventually, in 1927, the bubble collapsed anyway – the antics of the Japanese authorities had just made everything worse.
Yes I did type 1927 (not 1929) – and with good reason in the Japanese case.
I will now type another date – 2013.
2013 is when this credit bubble farce will fall apart – both in Britain and in the United States.
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Yes indeed. The way the word ‘inflation’ had its meaning changed is an interesting study in the importance of language. Once the original meaning is grasped, the idea of a central bank setting inflation targets is ludicrous and laughable.
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