How Much Damage Have Central Bankers Done?
A Lot.
This columnist’s book selections highlight the wreckage of ultra-loose monetary policy.
First up, someone must have a copy of You Always Hurt the One You Love: Central Bankers and the Murder of Capitalism by Bernard Connolly.
You might not need much more than the title to get your row going. But it’s worth reading on to nail down exactly why central bankers are almost entirely responsible for asset bubbles “unsupported by realistic expectations of future productivity,” along with recent financial crises and disruptive wealth inequality.
For more on how it’s all central bankers’ fault, follow Connolly with Edward Chancellor’s excellent The Price of Time, a history of interest rates.
Distort the price of money, says Chancellor, and you distort the price of time, the present and the future move “out of whack.” Overly low rates are in effect a type of “loan forbearance” that encourages investment and then traps capital in low- (or no-) return areas, something that has obvious effects on productivity.
How much social division might we see along the way? This one is Revolutionary Spring: Fighting for a New World 1848 – 1849 by Christopher Clark. The rebellions of the mid-19th century started in Palermo in January 1848
1844 the UK Bank rate was 2%, and easy money was flooding to the US and to France. The Panic of 1847 fast followed. Credit bubble, economic crisis, revolution.
https://en.wikipedia.org/wiki/Panic_of_1847
Merryn Somerset Webb Bloomberg 22 december 2023
https://www.bloomberg.com/opinion/articles/2023-12-22/how-much-damage-can-central-bankers-do-a-lot
1848 and all that
Merryn Somerset Webb at this blogg.
https://englundmacro.blogspot.com/search?q=Merryn+
Bernard Connolly at this blogg
https://englundmacro.blogspot.com/search?q=Bernard+Connolly+
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