Project Syndicate/Harold James/7-5-2022
“[Economist Milton]Friedman was contemptuous of all the conservative voters and politicians who thought that fiscal policy was to blame for inflation. But his disdain was misplaced, because there was indeed a connection between fiscal and monetary policy: high government deficits had been financed through the central bank. In both the United States and the United Kingdom, the treasury and the central bank had come to be seen as a unified ‘macroeconomic executive.’ Regarding themselves as globally dominant powers, both countries aimed to use their monetary sovereignty to secure advantages at the expense of the rest of the world.”
USAGOLD note 1: Is it any different today? If there is a difference, it lies in the fact that money printing has gone international, making it all the more dangerous. Central banks, as James points out, “are not as independent as they purport to be.” He concludes with a sobering thought. Putin believes that the breakup of the Soviet Union was “the greatest political catastrophe of the twentieth century. He may also believe that energy and food inflation “will destroy the British, American and European unions.” (Harold James is a professor of economics at Princeton University.)
USAGOLD note 2: To the original Four Horsemen of the Apocalypse (Death, Famine, War, and Conquest), we will add a Fifth – Inflation.
