QED 98: Rates soar
In QED 97 we recalled that supply inflation exists and was returning to bite (as we predicted in 2020), underlining that the somewhat shoddy elites we are equipped with would have managed it as if it were demand inflation. In a similar context, we said, monetary policy can only create problems, not solve them:
We reiterated the same obvious last week, recalling that wage indexation is one of the tools for managing supply inflation , but of course the path taken would have been completely different, that is, the right one for others and the wrong one for us:
(because we must always remember that "errors" such as austerity or the rate hike in 2008 – but especially in 2011 – are absolutely not errors: they are deliberate attacks on our economy).
History repeats itself the first time as Trichet, the second as Lagarde, and therefore what we widely anticipated from yesterday is reality :
that is, it is yet another QED (quod erat demonstrandum), yet another apt forecast of this blog.
The consequences of certain premeditated rash statements were not long in coming:
(the ten-year BTP rate represented in the figure can be found here ), and they are also appreciable from a legislative perspective:
The decade is above where it had come when "Borghi raises the spread" (I remember that that was the year in which Italy had its public accounts more in order – in spite of ourselves! – of the last decade)! And we got there with a slow but steady rise, testifying to what I remembered in an interview in February: when things get bad, there is no reputational shield that holds, especially if there is a firm intention to make them worse. And here things have been made badly by the inadequacy of the European response to the crisis, all green and distinctive, and we want to make them worse because unlike when the first attempt was made to give us a push, with the famous phrase about " closing the spreads ", other countries now perceive themselves as safe from the pandemic, while they perceive us as under protection and unable to react.
Needless to say, what is the only way to defend yourself: hold on to overthrow the elites who want to overthrow us. We've come very close in recent years ( remember? ): It's not an out of reach goal. But of course it requires that you do not rely on scum, like our friend Cotenna or other extras (like him) of this blog. On this, however, I am quite confident: I believe that on Monday we will be able to write another QED, and I already have an appropriate title in mind.
Ps: remember the referendums!
(… on the badger sketch I remind you, if you haven't studied it, Peternomics …)
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2022/06/qed-98-i-tassi-schizzano.html on Fri, 10 Jun 2022 07:38:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.