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This is a debate I regularly have with redstar, so just to let you know - I think that independent central banks are actually a good thing.

Inflation hurts the poor most. Thr only thing forgotten lately is that inflation has to include asset price inflation.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu May 10th, 2007 at 04:14:36 PM EST
[ Parent ]
Do you have a link?
by zoe on Thu May 10th, 2007 at 04:27:27 PM EST
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It's mostly been deep in sub-threads, but if you search for Jerome, redstar  and ECB together, you should probably be able to dig up something.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu May 10th, 2007 at 05:13:39 PM EST
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The only good Central Bank is no Central Bank at all.

Treasuries could quite easily issue credit directly under the supervision of a Monetary Authority, with no interest charged, but with a payment into a default fund for the use of a Government Guarantee, and a payment for administration payable to Credit Managers formerly known as Banks.

It's not Rocket Science: but it is the disintermediating logic of the Internet.

To paraphrase John Gilmour's great quote re Censorship:

"The Internet interprets Banks as Damage and routes around them...."

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Thu May 10th, 2007 at 05:26:34 PM EST
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I recently read Piketty's Les Hauts Revenus en France, where he made the point that with rent control, and wage rise easily given to those that'd become too poor because of inflation, inflation was a big part of reducing inequality during the 20's...

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Thu May 10th, 2007 at 07:36:42 PM EST
[ Parent ]
And when you index the smig, provide enough subsidized, wage-indexed rental housing and run your economy to be honestly at full employment (ie, jobs for all who want them) this can continue to be true.

Plus, inflation hits the poor different than the rich based on the basket of goods they tend to buy. US statistics detail that basket of goods per income cohort and, when cross referenced against CPI data, it emerges, for instance, that inflation is higher in the US for the poor and what the poor tend to purchase, and inflation is lowest for the wealthiest and what they tend to buy.

The fed reserve, of course, does not worry about this.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Fri May 11th, 2007 at 03:20:12 PM EST
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US statistics detail that basket of goods per income cohort and, when cross referenced against CPI data, it emerges, for instance, that inflation is higher in the US for the poor and what the poor tend to purchase, and inflation is lowest for the wealthiest and what they tend to buy.

The fed reserve, of course, does not worry about this.

I suggest a diary on Daily Kos.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Fri May 11th, 2007 at 04:52:47 PM EST
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The Banks are more concerned with providing a guaranteed higher interest rate for their customers and true owners than any their stated reasons of higher inflation rates.

Besides housing mortgage interest costs; there isn't any underlying significant inflation and housing costs are decreased by lower inflation rates; not higher rates.

As a social progressive; I am surprised you would be taken in by the central banks stated reasons and not look at the true underlying pressures from the 'elites' which control the banks.

by An American in London on Fri May 11th, 2007 at 03:22:37 AM EST
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As a social progressive, I am surprised you would be taken in by the financial conventional wisdom and advocate massive indebtedness through the issuance of bonds.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Fri May 11th, 2007 at 03:30:46 AM EST
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I've heard many times the "inflation hurts the poor most" bit, but no one saying this ever cared to provide a link to a decent study.

Do you have one?

As pointed out by Lucas below, some studies point out that the poor were doing better thanks to inflation.

(And of course you know my opinion on the current obscure process of inflation measurement)

by Laurent GUERBY on Fri May 11th, 2007 at 02:22:09 PM EST
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