Stagflation as strategy

ooh yeah, it's now becoming clear (well to me at least, and I know.. like, who cares? 😛) that interest rate hikes have another agenda..

Inflation's high sure, and interest rates need to be 'normalised' sure, but it's pretty obvious at this pace central banks are going to drive economies into the ground.. and actually that might not be a bad thing.. and maybe that's what the elite classes are thinking..

Once you start to get commentary from BIS, OECD, and the IMF, in unison with central banks you can be pretty sure "something's afoot"..

My stab in the dark is that it has finally dawned on these clowns that if the direction of travel keeps going where it's been going they are looking down the barrel of some serious political unrest in well off western countries on the middle horizon..

To avert that, the heat must be taken out of the housing, stock, and speculative markets, zombie businesses must be killed, sovereign debt must be reduced, and wages must rise..

What better way to do that that stagflation? Inflation inflates away government debt, inflation eats up the silly amount of liquidity pumped into people's pockets during covid government largess, inflation puts pressure on wages to rise.. Interest rates put the 'real cost of borrowing' back into the equation meaning everybody realises that all the investments they're holding are now worth 10% less per year over the next few years (inflation+interest rate = roughly a 10% discount rate) taking the 'wind out of the sails' of housing, stocks etc.

These things don't happen by accident, and all the media propaganda looks to be supporting the goal of changing people's expectations - "the party is over" is what they're saying if you read between the lines..

Japan is the outlier still, and proved long ago that economics text books are complete nonsense..

buggered if I know 😛