Idiot economists never learn, part #5619
I could shout my voice off about this, but no “real” economist will ever listen. There are again a discussion going on in regards to when the Swedish Central bank (Riksbanken) will raise interest rates. The “consensus” view seems to be late 2010/ early 2011. The market however, has priced in a raise already late 2009. I think this pretty much reflects reality, i.e. Riksbanken is trying to fool everyone that it will keep interest rates low, but everyone knows they can’t do this, because the market knows upcoming inflation when it sees it. Additionally, the economist “consensus” view is that after the first initial raise, the interest rate should be raised slowly by baby-steps. Stop 2 seconds to think about this.
Meanwhile, the “consensus” view on the american economy is that Alan Greenspan kept interest rates low for too long, and then raised too slowly, using baby-steps.
Mental Meltdown? I think it was Einstein that said that insanity is doing the same thing over and over again and expecting different results.
Touché. Stagflation it is then.
