Lagarde and Powell are dragging businesses and families towards the crisis
Said Agatha Christie that three clues make a test. And so: Silicon Valley Bank, Swiss credit e First Republic Bank I’m here to testify that something in the financial system has broken. Indeed, it was broken, from the outside, with awkward and very dangerous interventions. It is no longer just about the somewhat mysterious rooms of Wall Streetfrom finance to Gordon Gekko. To bring down inflation it was decided to unleash an economic crisis with potentially devastating effects while moving forward with one war in Ukraineno prepare another one in the Pacific and an energy transition is underway which will lead to higher payments for businesses and households. Nice Shot!
If the Fed governor Jerome Powell – and on the wheel Christine Lagarde, the King Midas in reverse as we had renamed it in Businesswhich follows by disallowing any Overseas move as guaranteed a Nicolas Sarkozy blind obedience – raise interest rates from 0 to 4.75% in one year; if therefore one thinks that to combat structural inflation originating from a perfect storm one must continue to raise the cost of money with all that follows; finally, if it is believed that cooling down the economy that was recovering after the Covid bloodletting is a good idea, it means that whoever leads the central banks is inept, a bureaucrat to the nth degree he thinks he has in management the knobs of power it automatically makes him authorized to make household and business pork.
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