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> A central bank can create infinite money out of thin air, but we never stop to think about that. But central bankers think about it on a daily basis. Christi

> A central bank can create infinite money out of thin air, but we never stop to think about that. But central bankers think about it on a daily basis. Christine Lagarde has certainly paid a lot of attention to whether the amount of money the system demands is about right or whether an interest rate rise is needed to stop the economy overheating, whether there's enough liquidity and financial control the commercial banking system the central bank feeds into, what the change in the shape of a bond yield curve says about investors longer term expectations of for money, and what the side effects of all this money coming in is on the rest of the economy, and whether a particular downturn is better ameliorated by fiscal policy. Thinking about this is literally why her job exists. People LOLing at "fiat" currency coming from nothing whilst rushing to buy the newest token invented from nothing (as a wealth generation exercise for its creators) that isn't supported by monetary policy (or redeemable as legal tender), not so much.

yucky 4y ago
>But central bankers think about it on a daily basis. Yes, and it is them we have to thank for the massive inflation too. So either they want the highest inflation in 40 years, or they are inept.
- notahacker 4y ago
  It's also them you have to thank for 40 years of not having massive inflation, which was a pretty regular thing in earlier times. (And yes, they absolutely do prefer the high inflation outcome from a fuel supply shock following a COVID shock to the raise interest rates and crash the global economy like 2008 outcome. That much is a policy choice)
  - yucky 4y ago
    Why does middle class wealth destroying inflation go hand in hand with fractional reserve banking?
    - notahacker 4y ago
      It doesn't. Developed countries had more periods of 9% inflation in metallic standard eras and the middle classes have long avoided holding the majority of their wealth as cash.

yucky 4y ago

>But central bankers think about it on a daily basis. Yes, and it is them we have to thank for the massive inflation too. So either they want the highest inflation in 40 years, or they are inept.

notahacker 4y ago
It's also them you have to thank for 40 years of not having massive inflation, which was a pretty regular thing in earlier times. (And yes, they absolutely do prefer the high inflation outcome from a fuel supply shock following a COVID shock to the raise interest rates and crash the global economy like 2008 outcome. That much is a policy choice)
- yucky 4y ago
  Why does middle class wealth destroying inflation go hand in hand with fractional reserve banking?
  - notahacker 4y ago
    It doesn't. Developed countries had more periods of 9% inflation in metallic standard eras and the middle classes have long avoided holding the majority of their wealth as cash.