A political backlash against monetary policy is looming
Cartoon courtesy of MichaelPRamirez.com
“Three weeks ago, Sanna Marin, Finland’s prime minister, retweeted a link to an article by a Finnish academic together with the following quote: ‘There is something seriously wrong with the prevailing ideas of monetary policy when central banks protect their credibility by driving economies into recession.'”
USAGOLD note: Marin’s criticism goes to the heart of the matter…… It raises the fundamental question how the Fed got itself into the position of having to defend its credibility in the first place. It wasn’t simply that it printed money, but that it printed money and encouraged fiscal spending then tried to downplay the resulting inflation as something likely to be short-lived. Now, in the name of restoring it credibility, it is advancing a policy that could damage its credibility even further.