Quote:
Originally Posted by bizaro86
I think the big difference between 2008-2009 and the covid response was where the money went. 2009 was basically all quantitative easing, so most of the money went to investors who kept it as investments. Covid was direct transfers to people, and once consumers could get out and spend they did, so the velocity was higher.
But really, the crux of my argument isn't that he should be 100% accurate predicting the future. And 2009 is n=1 for "money supply increases not causing inflation". If we go further back there are plenty of examples of big increases in money supply immediately followed by big inflation. I'm not saying he should have been sure that would happen, but he absolutely would have been aware it was a possibility.
If I might have to work late I dont promise to pick up my kids from school. At the time he made that promise there was a good chance he would have to break it, so he shouldn't have made it.
I'm not saying the chance was 100% (because that is hindsight bias) but with all the inflationary actions being taken worldwide it wasn't a tail risk either.
I'm not a gold bug/prepper/inflationary doomsayer (at all, actually, I mostly don't do macro), but I think the person in charge of our monetary policy should be able to think probabilistically. More than one future is possible.
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If your kids are having a panic attack and can't sleep because they are worried about some terrible ominous event like their parents dying, you would probably assure them and make a promise that nothing bad was going to happen to you...even though that's pretty dishonest. You should really start breaking out statistics on car accidents and heart disease so that they can critically assess the likelihood that you will sustain a major injury or death anytime soon.
No, your aim is to get them to sleep and work on the bigger context of scary life events in the days/weeks/months to come.
A big part of the BoC's job is to be the calm/competent/trustworthy parent at the tiller. Global pandemic is not the time to acknowledge your fallibility. However, the warnings started to come and become more prominent throughout this whole calendar year. It's simply ridiculous to cling to headlines from 2020 at this point.