Topic: Will central banks ultimately fail in their goal of lowering down inflation? - page 3. (Read 724 times)

Sometimes the government relies too much on the central bank to overcome inflation, in my opinion this is a mistake, without increased production, inflation will continue to occur, and it is proven that many central banks fail to overcome inflation so as to make the economy chaotic.

We are seeing it clear that unemployment rate is on the increasing side and I still get to wonder how people will be surviving without jobs and government not providing jobs. CPI work with capital and no capital is meaning no investment and no job can be created in all this circle working this way we are still going far in this economic downturn.

From what I can see the rising rates has maybe a very small effect. I see that the CPI is much lower than before however everything is still very expensive. Grocery prices still keep going higher and higher.

The nail on the coffin will be if the employment numbers show some slowdown meaning that unemployment has bottomed and will go up. Right now we got a bad labor shortage and it’s causing this inflation to worsen. This week we get the CPI numbers and we will see how they go.

What surprised me is that there was not much inflation until a year ago, which is when it started to be noticed, despite the expansionary policy of the central banks. In reality what happened before, like after March 2020, is that inflation went to financial assets rather than consumer goods.

Bringing down inflation in goods and services will depend on a number of things, not least lower energy prices, but even if it is achieved, I do not see central banks reducing their balance sheet indefinitely. As soon as they can, they will start printing again, and hopefully the effect of this will be that the extra money will push up prices of financial assets such as bitcoin, rather than goods and services.

That's certainly true, mate. Unless COVID-19 and the Russo-Ukraine war go away, we can't expect inflation to ease anytime soon. Governments are going to need to work together to put an end to the war for the good of the economy. I'm wondering if prolonging the war is a plan for governments to go full-speed ahead for a global reset. Effectively, the rich have become richer, while the poor, poorer. Let's see how long will it take for inflation rates to lower down to an acceptable rate. It's a widely unpredictable world we're living into, so we can only hope for the best. Who knows what the future holds for the global economy? Just my thoughts

These things are the catalysts not the reason. The real reason is printing money which is the easiest way incompetent economists use to blow some life in a dying economy. For example if they hadn't printed so much money during the COVID19 pandemic we wouldn't have seen such high inflation rates. Same with these days that they are constantly printing more money in 6 months to a year from now we will see much higher inflation rates not because of whatever conflict will be happening then (like Taiwan-China or continuation of NATO-Russia conflicts) but because of this money printing today.

They are both impossible in our lifetimes. They are too desperate for fossil fuels that they are trying to buy any amount of it from literary anywhere! Just recently US removed some sanctions on Venezuela so that they may be able to buy some oil and oil products!

The problem is that they want to reduce it at ANY COST. This is why they keep increasing interest rate which can only work a little and only to a certain percentage. It has already failed since both inflation and interest rates are high (7-8% vs 4%).
Unless they can decrease oil prices magically to <$40 there is no way to save the economy in near future. Specially when inflation and recession creates a worse crisis than 2008 soon.

Yeah, it's starting to be stable for now and the effect will gradually come to the economy of all the countries. Those top leaders can pressure them to push for more supply so that the prices will go down and it will be a domino effect.

Well, I don't know much about OPEC but if there's a world elite that holds and controls it, they won't be pressured to any command by a world leader.

Printing of more money during the height of the pandemic is also one factor. It's a consolidation of many factors but having that high price with oil is also one of the major reasons.

Well, as it become stable these days, oligarchs are still pushing for limitation of the supply so that they can still capitalize the situation for the other countries.

Good comparison, when oil goes up then everything goes up. The same with btc and alts, when btc goes up, most alts are going up too.

I don't think they will fail and the reason is central banks are not independent of individual government and so their decisions and regulations are government policies. Interest rate is not only what reduces inflation, the government also has role to play like increase productivity and exportation will also help to stabilize the economy, increase GDP. Increase productivity is the direct role of government, production will reduce scarcity,  as a result of this inflation will be reduced.


There is solution but not to the extent that things will go back to the way they were before the war and covid-19. Before then wheat production was cheaper and it gets across to countries that are in need easily and we understand how oil price have also skyrocketed now, these won't be the same anymore.

Currently the only barrier that is standing between world getting crumbled upon itself in terms of economic crisis and doomsday preparation is current Money reserve of every country! Once they start to exhaust and once government is no longer on the possession of real money circulation things gonna go out of hands. For now countries like USA, Europe are trying to show that they are completely fine but they are not. All they are doing is showing us unrealistic values. They don’t have money, they have virtual back ups and bonds and nothing else. If employment is going down then taxes will go down and money circulation will halt even further. Central will have no option but to declare long lasting economic crisis.

Many thinks they are the primary cause of it because banks supplies money and more money means more inflation but I think you are right that there would still be other factors that are involved here. Still, banks can help by not producing more money and let the government or the people find some alternative remedies, I am sure there are some available out there.

It seems that the oil is like a btc, because oil also controls the price of other goods while btc is known to control the price of other cryptos. Producing more oil not only helps lowering the effects of the inflation but also the recession because it will force oil companies to hire more people to speed up the process.

Actually they will be able to do it right because they also did in the past and they have always managed to escalate the situation towards right road. In fact I could not imagine world getting into negative trends for very long terms. It will impact the lives of common peeps like me and it would be hard to sustain a good lifestyle for very long. Obviously every bit of action by government and central banks will impact us so they must recover the world from such down trend. Whether they use high taxes for time being and try to get it in-line or whether they use other ways (like bitcoin) but they should do it.

Central bank can not bring down or reduce inflation because the world economy is been ravaged by two major factors which can bring down the economy of any country. The Covid-19 has done a lot of damage to our economy, the world hasn't even recovered from that damage before the war came in to worsten the whole thing.

For the decline of inflation to be achieved, so many challenges that the world economy is facing should be tackled,there should make way to create peace in the ongoing war by dialogue with both countries involved instead of sponsoring or assisting the continuation of the war. Nobody knows for how long this war will last and it  will do more damage to the world economy and more inflation will be experienced because they are all focused on winning the war and not considering the damage it is doing to the world at large.

Its not really inevitable though as steps to slow things down or stop inflation from happening completely could have been made before inflation rise but nah we always have to deal with it then banks will put up counter measurement to the inflation after its effect has been 'damaging' atleast so people are totally used to inflation as part of economic cycle by now

Indeed, it is a biggest factor behind skyrocketing of inflation all over the world but the price of crude oil are more or less stable around $80 which is good news but it should gradual come down to Pres-Ukraine level to see a meaningful impact on inflation. OPEC can play an important role by increasing supply but question arises why they will do it, they are making good profit in the current market situation.

Inflation is an inevitable companion of the economies of states and it has both positive and negative sides. We see that the global economy is falling, and inflation is growing for objective reasons, including the damage from the coronavirus pandemic and the fight against it, as well as the war between Russia and Ukraine, which led to a violation of the supply chains of petroleum products and agricultural products, and also led to the application of international sanctions, which in any case have a two-way effect.
States will never be able to overcome inflation, because it is also necessary, because it helps in the redistribution of production and human resources.

Well there's still the issue of the Russo-Ukraine war and the COVID-19 pandemic. How will central banks control inflation when there are large disruptions in the global supply chain? Not to mention, geopolitical tensions are on the rise. If they want to "fix" the economy, governments need to deal with the aforementioned issues first. Unless the EU becomes energy-independent and the US abandons fossil fuels for good, we won't be going anywhere soon.

There needs to be a collaborative effort from all sides to help beat down inflation for good. While I admit inflation won't disappear completely, it's possible to reduce it to a point where it doesn't affect poor people. The US is aiming for a 2% inflation rate, so we're going to have to see if that will work out in the long run. Maybe 2024 will turn out to be a bright year for the global economy? Just my opinion

once FED pivots, this will go run wild again while they send stimulus money. it becomes a cycle, after stimulus, they will again raise interest rate.

how long can they hold down the inflation because this is already a runaway inflation when you see news the banks are already not allowing people to withdraw.

That’s the thing, people do not realize that what gone up, and caused the inflation, doesn't need to go up and stay high and still cause the inflation to drop. Like for example a carton of milk can go from 1 dollar to 4 dollars, that’s 4x inflation and terrible right? But, next year if it goes from 4 dollars to 5 dollars that’s only 25%, and the year after that if it goes from 5 to 5.05 that’s only 1%.

Now, in 3 years it went from 1 to 5.05, but the inflation is 1% for the last one. That’s the key here, it will still be all things very high in price for sure, there is no doubt about that but the inflation will not keep on growing bigger and bigger, it will look like it’s going down.

Yeah, in your world maybe, in reality, WTI is at $78 and Brent at $85, as usual!


It's 1.5% in the EU, but don't let details like numbers stand in your way.


"Biggest economist" ?


Don't you dare be optimistic about something, read the mood of the room, we're all doomed!
Actually, that rhymes!  

But it's indeed funny.
In the previous topic, I read everyone was looking at the new generation as people who can't overcome a challenge, who are dependent on their smartphones, the generation that will crumble under an ounce of stress, and look what we have here, almost everyone saying the world is done for, that nothing better will come, that we live in a matrix where we're just at the mercy of the ones controlling it and so on, I can't make head and tails of what's happening here.
On one side we promote independence how the new system will change things, and how problems will be fixed, on the other side, nothing you can do, just crawl under your bed and swipe for the bad news. If the economy recovers and we see inflation back to 1-2%, lower unemployment, and the war will be over I think we need to start having some counseling topics to prevent a few users to commit suicide as they will have a total breakdown seeing another apocalypse failing.

They have already failed.

Increasing interest rates can only succeed if they can actually reduce inflation by reducing the energy cost. If you look at most of the previous times they manipulated the market by working with interest rate, they followed that up by decreasing fossil fuel prices like oil. However, this time not only they failed to have any major effects on oil price (it is still above $90 and eyeing $100+) but also the gas price is still very high.

The interest rate is already 4-5% in US and EU and it is at the highest amount it can be. Any further rise won't have any effects as the previous time FED increased the rates it didn't have the effects they hoped for. So now it is causing recession instead while energy prices are still high.