I already described in my last piece that it is almost impossible nowadays to bring an indisputable fact to the attention of the people in such a way that even politicians feel compelled to question all too simple views and also to go against the economic prejudices of the majority for once. …
Those who make fundamental mistakes need not be surprised that they trigger fundamental irritations. The ECB has just decided that in order to fight “inflation” it will stop buying government bonds and raise interest rates, and already it is being overtaken by reality. …
Central banks demonstrate their knowledge and their experience by having a clear judgement about economic developments and the causes of significant price increases, and they should also be able to communicate their judgement and its background effectively. A central bank that decides to raise interest rates and then has revise this decision a short time later because it was completely wrong in its assessment of the economy and/or prices loses credibility for a long time. …
