| > Commodity market speculation is also caused by too much cheap money sloshing around with nothing productive to do, and the solution is still to increase interest rates. By the time central banks decided to raise interest rates That's a fair statement, but the timing is crucial, as you seem to note above, and the timing of the interest rate hikes is what the author is criticizing: "But as importantly, through lack of analysis, regulation, oversight and foresight - central bankers have shown this last week they were prepared to use high rates to risk and even precipitate bank failures and global financial instability. They have done so, and continue to do so by deliberately tightening monetary policy into heavily indebted economies, with falling real incomes. Economies that have still not fully recovered from both the GFC and the pandemic." "In other words, their effective preference is for class war over financial stability." "The big question central bankers must address is this: why did speculators and venture capitalists notice these imbalances while they and financial regulators did not?" > wage growth had already lagged behind inflation Wage growth almost always lags behind inflation, because it's much easier and quicker to raise the price of goods than for workers in general to demand and receive wage increases. |