Search
Tuesday, November 29, 2022

Are Central Bankers Really Wrong?

It can hardly be trusted that those who have an economic pulse in the world even try to redefine the meaning of words to justify failures, so what happens?

In late 2020 and early 2021, around the world, people who closely follow the growth of the economy expressed concern as they saw an unusual rise in prices for a long time, then lukewarm but worrying.

The first reaction from central bankers such as the Fed and the European Bank was that there was nothing to worry about as it was a natural movement due to the revival of demand after the global confinement. Maybe they were right.

But 2021 went ahead and the discourse did not change, despite the fact that this increase in prices was more pronounced every day; So we got past the first half of that year and the pressures became more and more intense, so the readings on inflation in regions like the United States and Europe started getting higher and higher.

At the beginning of the third quarter of 2021, inflation readings in many countries and territories, including Mexico, were the highest in decades. That’s when top central bankers acknowledged that such inflationary pressures were unusual, almost a year later.

Today, as we all know, the main concern and business of those who guide the monetary policies in the world is the fight against inflation, they try to prevent this excessive increase in prices that will affect practically the whole planet in this century. unprecedented for, and that in some cases they had not been seen for 40 years.

But there was evidence, humility aside, that many of us suggested that inflationary pressures may not be temporary at the dawn of 2021. I forgot to mention that the central bankers’ refusal reached such an extent that they first used the word “temporary” to negate them, and they later attacked the language academies to rediscover the meaning of the said word. dared to try. World. , given that everyone had misunderstood him.

Read Also:  Live updates: Musk's Starlink internet 'active' in Ukraine

Today, all roads lead to a global recession, or even more in most countries, including Mexico.

All those who follow economic events around the world consider it highly probable, others as a matter of fact and others also believe that regions such as Europe are already in recession.

But central bankers continue to refute it, debating a thousand things, hoping the media will believe it and spread it, shutting itself down in its reality.

While recession is almost inevitable for many, others shun the word “almost” outright; In this place we have sent many voices, and yes, everything indicates that such a great disaster, including Mexico, cannot be avoided.

In fact, as of this past week and after the collapse of the markets, another, most analysts have changed their language and are no longer thinking whether there will be a recession or not, but what magnitude and duration it will be.

Central bankers, arguing a thousand things, in their figures and in their accounts, adjust the data to leave it very close to a recurring period, but refuse to recognize it.

Women and men, men and women trained in the best and most prestigious schools of economics, with master’s degrees and doctorates, with vast experience, with great intelligence, certainly reached positions like them.

If they are people who are so academically and professionally prepared, how is it possible that they are wrong? Or, are they really wrong?

It may not be possible that a character like Jerome Powell has made a fool of himself by trying to reinterpret the word “transient” to refer to the most visible, popular and relevant central banker in the world. Has been that it meant something else and that the whole world was wrong, that they misunderstood that word.

Read Also:  Freezing wind, indiscriminate snow storm in Nevada | AP News

Are the people who have the day-to-day economy of a country or the world really wrong and have figures that few mortals have?

It is hard to accept, such inconsistency is hardly believable. So what happens?

Perhaps one explanation could be their role as central bankers and, in fact, public officials of institutions, which are mostly autonomous, yet part of the state structure.

In the sense that they play a political role like any politician, only that their actions and words are almost always more relevant than those of most politicians, and their mistakes too.

Because it is a mistake, that history will record, to lock himself in office and deny with a single word, for almost a year, inflation rose and increased, to say later that the interpretation of the said word by the language academies. Means: “transient”.

These actions are very harmful; Trying to produce a more or less optimistic scenario, not creating panic and working to stabilize the economy or get out of the problem that it is in, can be counterproductive if the person or persons doing so see the reality. Tries to sell that doesn’t even exist..

It’s like the doctor who advises the patient on “correction” and tells him that he only has a “catarrito” and will, when the evidence indicates he may have pneumonia, remember?

For now, central bankers have done it wrong: they allow inflation to reach levels not seen in decades, yet they refuse to recognize signs of recession, hoping when it will come, as the whole world says. That it will inevitably come, has the tools, strategy, knowledge and humility to get the economy moving as quickly as possible and recognize its mistakes.

Hopefully they play more of a role as central bankers and less as rude politicians than we already have in the world.

Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.

Latest News

Related Stories