Why will interest rates likely rise in the US under the new impending chair of the Federal Reserve, Jay Powell? Because he is tall. Or so says financial journalist and editor, Alan Kohler.
It may only have been a fraction of a percent but make no mistake, last week’s interest rate increase was a big deal. It signalled the Bank of England has given up on reviving the economy, having already inflated the assets of the already rich through its dangerous game of monetary policy. Bank and Treasury economists (aided and abetted by the OBR) are guilty of defeatism. They argue that despite their powers, there is nothing to be done.
Responses to previous instalments of my “Economic Perspectives” include queries on why unbridled credit expansion by the main central banks in USA, UK, EU and Japan does not appear to be reflected in a commensurate rise in the general price level, affecting all sectors of the economy.
Central bankers continue to “stimulate” growth by applying the twin practices of quantitative easing (QE) and lowering interest rates. It’s clear that these policies simply don’t work – but the real surprise is that they continue to persist with them, and do not give up.
Prof. Stiglitz on who should really take the blame for the financial crisis.