Inflation Targeting is Failing Around the World
JP Irving reports from Sweden:
Since about mid-2011, the Riksbank has turned from the bold imposer of negative interest rates, to the timid, fretting institution we know today. Despite most forecasters expecting a steady if not catastrophic rise in joblessness this year, a flatlined CPI and a strengthening currency, the Riksbank chose to leave rates unchanged today. Note that this does not mean that monetary policy was unchanged. Quite the contrary, Swedish monetary policy was tightened meaningfully.
The Swedish central bank has on their Board one of the smartest monetary theorists in the world, Lars Svensson… and they are still failing.
Over in Japan, the central bank openly spits in the face of democracy, announcing today that they really do have every intention of ignoring the 2% inflation target set by Abe’s government:
For the time being, the year-on-year rate of change in the CPI is expected to turn negative due to the reversal of the previous year’s movements in energy-related and durable consumer goods, and thereafter, it is likely to be around 0 percent again.
Do I even need to mention the Eurozone? Here is Left Outside trying to contain his disgust at the ECB last month:
The Eurozone is blowing up. Unemployment is increasing across Europe and this is in large part because of contractionary policy from the ECB.
What they have not done, in a continent savaged by depression is cut fucking interest rates in the last six months. They have another 0.75% before they reach 0, but they are not willing to do so.
If you’re not outraged, you’ve not been paying attention.