The new role of central banks – Natixis
Rather than maintaining the fiction of independent central banks having an inflation target and thereby ensuring financial stability, it would be better to accept the idea that central banks are not independent, per Natixis.
Key quotes
“Central bank independence is a fiction since they are forced to intervene to prevent government insolvency crises: what they are doing is pure monetisation of public debt, which in theory is prohibited.”
“The inflation target has lost its meaning since money creation is no longer correlated with inflation in goods and services prices, but with inflation in asset prices.”
“Ensuring government solvency by monetising public debt is incompatible with the financial stability objective (stabilisation of asset prices).”
Reprinted from FXStreet,the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.