Interest rates, the ECB copies the Fed
There is a slowdown in inflation, partly due to the cooling of prices, why? Consumption has decreased, partly because companies are struggling to receive financing, reason? Reduction in production and in some cases starting to lay off people, partly because the price of crude oil has recently lost around 9%. The question everyone is asking is: what will the ECB do?
According to the latest statements by President Christine Lagarde rates, at least for the next few months, will remain at these levels and she is also supported by her compatriot and Governor of the French Central Bank François Villeroy de Galhau.
I would like to ask Lagarde some questions: 1. knowing that the US GDP is 22.2 trillion dollars with 332 million inhabitants, while Europe’s GDP is 18.4 trillion dollars with 448.4 million inhabitants (about 45% more) why is it necessary to follow the steps of the FED?
Why knowing full well that all this monetary tightening can cause a recession from which it is very difficult to escape until after years? What is the purpose of discouraging consumers and companies? Why continue to support these rates knowing that the public debt of European nations costs much more and at the same time there is no increase in GDP? Wouldn’t it be better to follow the dictates of a possible state evergetism to increase work and start a virtuous circle?
But is it really that difficult to understand that we are no longer in the 70s? Globalization, more or less desired or more or less forced, it brought about side effects that were seen many years later and the deregulation of the banking world also contributed to this, a real debacle, which cost and still costs hundreds of billions of dollars, think there are even those who have received the prize Nobel for these ideas and for having done nothing to stop the wild speculation that has damaged and continues to damage the whole world.
The infamous deregulation is still in force and will continue to cause damage and no one has yet intervened, not even the ECB. Now it must be said that after three industrial revolutions: the steam engine, electrical energy and the development of communication (IT and internet), the fourth is already advancing rapidly, namely Artificial Intelligence, which if it manages to discover diseases not diagnosed by specialists and at the same time propose the necessary treatments, then it is not clear why the ECB (like the other Central Banks) should not use it and perhaps get a recipe to manage the monetary aspect “better”, given that it is only this that should take care of. Having said that, do we think it’s time to get a helping hand from AI?
Is it enough to simply enter the data and from its “processor” we will have numbers and suggestions on which we can possibly rely or is it better to adapt to making a copy and paste and letting ourselves be guided by the Fed? One last question: what are we paying you to do if you can’t even make a short-term forecast without damaging the economy?
If there isn’t an economy there won’t be any banks either (which today make stratospheric profits to the detriment of consumption and the economy itself) and therefore money won’t even be needed. Maybe we didn’t realize it, but times have definitely changed and it is necessary to adapt and then what’s the point of asking Lagarde what to do, just ask Jerome H. Powell who gives directions to almost all Central Banks. Ipse dixit
#ECB #doormat #American #Central #Bank