Tuesday, April 1, 2008
It’s time, I think, to ask some really fundamental questions about the conduct of economic policy.
"To my mind, the problem lies partly with the blind devotion to inflation targeting. Admittedly, this is a sacrilegious view which won't find favour with the high priests of the central banking community. Nevertheless, inflation targeting is not, and never was, the cure for all our economic ills. To understand why, we need to go back in time..." Remember that King is Economic Director of HSBC. He is a banker and he is calling for an end to inflation targeting. Well. I thought we were already there!! I almost believed he was on our side, until he completely failed to mention control of M3 money growth. With HSBC offering 1yr bonds to its customers at 8% and bleating like this, I'd say that its time to short HSBC. p.s. I forwarded this message to King's e-mail.