FAST FIVE: If Central Banks Do Not Tackle Inflation, Deflation Will Come From A Crisis

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Money supply (M2) annual growth in the United States was 6.5% in May, 6.6% in the eurozone.

We already explained in a previous article that commodities do not cause inflation, money printing does, and the monetary aspect of inflation is not being addressed properly.

One or two prices may rise due to an external crisis, but the rest would not rise in unison given the same quantity of currency.

We did see enormous inflation in asset prices, though, and policy makers did not pay attention to the impact on house prices and markets of enormous liquidity injections.

The pace at which they bloated their balance sheets and cut rates is what they should have been worried about, not the normalization.

Categories: ZH