Zimbabwean central bank governor Gideon Gono has long held the title as the worst central banker in the world. However, I would suggest there might be a new candidate – Argentine central bank governor Mercedes Marcó del Pont.
Here is some quotes from a recent interview:
“it is totally false to say that printing more money generates inflation”
If that does not make you scream then listen to this:
“We discard that financing the public sector is inflationary because according to that statement the increase in prices are caused by an excess of demand, something we do not see in Argentina. In our country the means of payment are adjusted to the growth of demand and tensions with prices must be looked on the supply side and the external sector”.
It gets worse…
“We’re recovering the sovereign capacity to formulate and implement economic policy”, said Marcó del Pont who anticipated some pictures will be coming down from the bank’s hall of fame “beginning with Milton Friedman.”
Ok, I kind of guessed that the governor doesn’t like Milton Friedman, but this is bad. It might be that US and euro zone monetary policy is too tight, but that is certainly not the case in Argentina. Instead all signs are that inflation is getting increasingly out of control in Argentina. However, that is not visible in the official Argentine statistics. You will see the reason here. Sad, sad story…
UPDATE: Marcus Nunes has exactly the same story, but as usual Marcus was faster.
Marcus Nunes
/ March 30, 2012Lars
You haven´t been reading my posts!
http://thefaintofheart.wordpress.com/2012/03/30/this-is-what-happens-when-the-president-controls-the-central-bank-good-for-a-big-laugh-before-argentina-becomes-the-next-zimbabwe/
Lars Christensen
/ March 30, 2012Haha Marcus…we wrote exactly the same post!;-) But you were as usual faster…
It’s incredible isn’t it? And scary…
tristangrimaux
/ March 30, 2012Yours is a perfectly understandable response to what Mercedes Marco del Pont is doing with Argentina’s Central Bank.
As a complimentary note you should read this http://www.economist.com/node/21551507
Lars Christensen
/ March 30, 2012Tristan, thanks for the link. Argentine monetary policy of today is a sad testimony to how much damage a central bank can do to a country’s economy.
Martin
/ March 31, 2012I was actually looking at this: http://research.stlouisfed.org/fredgraph.png?g=66x a couple of days ago. I don’t think it can take much longer before it goes into full-blown hyperinflation. (I somehow don’t think that this increase is offset by velocity..)
ps. I’ve also heard news/rumors that Argentina is holding up textbooks in neoclassical economics in customs…
Marcus Nunes
/ March 31, 2012Martin – What they´re doing is having people show up at the airport to pick their books bought online at Amazon (and others) and pay up to USD 80 to take them home!
Brett Chappell
/ April 2, 2012I suggest that we send Señora Marco Del Pont an e-learning tool:
http://www.frbsf.org/education/activities/chairman/index.html