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Central Planners Double Down On Beating Inflation But…

Remember when the mantra from Central bankers was inflation was temporary? This was still being recited late last year, despite the rapidly expanding money supply created by the reaction to COVID (which had already been expanded by the reaction to the GFC in 2007 and beyond.

Ultra-low interest rates were coupled with excessive Government fiscal support from direct payments to businesses and households, and indirect support to businesses. This combined stoked home prices, and credit growth, in an attempt to maximise employment and sheeted inflation mainly to supply chain disruptions which would sort themselves out. RBA Governor Lowe late last year said no rate rise until 2024, and only recently changed his tune.

But fast forward just 6 months, and the tone has been changed completely, with a bevy of the world’s top central bankers delivering a stern and unified message on the need to curb inflation, declaring at Jackson Hole that it is broad based, here to stay and will require their forceful action. Like lemmings, they are now all running to the “must kill off rampant inflation at all costs” exit instead.

Begs the question, were they wrong then, or are they wrong now? And whilst they plan to lift rates significantly higher, will it actually tame inflation or not? And what collateral damage will these rate increases cause?

I for one have little confidence in the whole Central Planners and Bankers edifice. They are of course unaccountable, and unelected.

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Written by Walk The World

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  1. Pivot ? means Hyper inflation .
    only way for affordable Aussie Houses , more higher interest rate's .
    With Recession and High Unemployment .
    We are living in , Interesting Times .

  2. Agree with your conclusion.
    Anyone else as fearful as I am about the upcoming budget? I think we may learn the true purpose of superannuation – a pot of money for the government to raid as they see the need to.

  3. The inflation is caused by commodities shortage. The geological mechanism for the formation of most commodities has been well understood for 70 years, and increased exponentially since. There are few commodities depoits to be found. With commodities suooly particularly energy challenged and declining into the future it is time for planned and managed economic decline in line with commodity supply or face chaotic depression, hardship and anarchy.

  4. This top-down philosophy is keeping the rich, Richer and protected from paying for their mistakes. Its either win-up or Fail-up to more bonuses and rewards. They are in control, so until it all falls in a heap, I don't expect anything to change.

  5. These "central planners" whom ever they are…represent elitist intrests..wages will
    continue stagnating against cost of living spirals..full employment stats against fallen discretionary demand..austere stagnating times

  6. The current RBA duties should be under full control and direction of elected politicians so that they are held fully accountable,would be much better.

  7. when they get serious , they will roll out their cbdc , and 80% will welcome it , thinking that they will keep their job , while every one else lose's theirs

  8. Martin, it is time we gave up on the central banks. They have never been right about anything. We need a free market system where the market prices interest rates and currency backed by gold and other commodities.

  9. I guess that most people really are too stupid to realise this is all planned to eradicate the wealth of the middle class
    Following the crash will come UBI via controlled CBDCs

  10. Great Report Martin stating the FACTS and why Globalist Fed Gov Banks caused the problem in the first place. As i reported on twitter 75pts in RBA next Mth is certain or maybe higher , Yet on Friday just gone Bond traders in Aust sent Aud Bonds lower on short and long Ends , i suggest they will be bailing out in the morning .. Will be interesting week going forward. i see long end at 5% and short end even higher as until REAL inflation eases ( over 15% ) they (RBA) have no choice . AUD is being sold off across the board even tho Aust is in surplus . RBA must keep currency above 65c USD otherwise Inflation spikes again big time and Oil is also heading north . Gold will be under pressure at these high interest rates too so see potential downside to 1650 USD in short term.

  11. Nailed the problem description in the first 2mins. Nice work as always Martin. The last 3 years will feature in future economic text books of what not to do in a temporary economic shock. And Lowe’s legacy will be to go down in history as the single most damaging vandal to Australian’s standard of living. I wonder how he sleeps at night knowing he shares the infamous title with Scomo as the most hated post-war leader Australia has known. Now how do we inflict the two of them on China?… finally, I can’t believe I’m saying this, but I think Powell has finally turned up to work. Even if his was responsible for August’s irrational surge in Margets due to a pathetically dovish speech beginning of the month.

  12. Given the OS debt owed by Australian banks our interest rates need to stay in step with the currencies money was borrowed from. An then theres all those manufactured goods Australia can no longer make for itself that have to be imported.

  13. September almost here and I sense we’re in for some rough-and tumble. Scrambled eggs anyone? Yes, buy your eggs now while you still can afford them or before your money becomes worthless. Humpty Dumpty fell off the wall a long time ago and all the king's horses and all the king's men will not be able to put him back together again.

    ‘Omelets are not made without breaking eggs.’ Maximilien Robespierre

    Rumble Tumble
    by Frans Kuiper

    Let’s ready to rumble,
    Old beliefs start to crumble,
    We're wiser and more humble,
    Life should be rough-and-tumble.

    No longer will we comply,
    Everyone is free to fly,
    Frequency vibration high,
    Wipe those tears and do not cry.

    We create reality,
    Lead never follow blindly,
    Embrace creativity,
    Good-bye negativity.

  14. Thanks Mr. Martin…Interest rates will remain low…housing prices will never crash and the risk to leverage in Australia will remain low…I don't know wot these folks are on but I want some of it!

  15. Thanks again Martin!
    Since inflation is increasing the money supply central banks caused inflation. And knew this would cause it; so they were lying when they used the transitory term. Price rises are the effect. Expect more and continued price rises

  16. Powell knows the US has flirted with civil unrest throughout 2020 and 2021. If he doesn't get inflation under control, the low income households will come with their pitch forks and torches. If the US descends into inflation driven mass-unrest, many other countries will follow.

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