H. L. Mencken: “For every problem, there’s a simple solution. And it’s wrong.”
See also here – What the Turkish central bank did a year ago the Russian central bank is doing today. Not good.
HT Josh
H. L. Mencken on the Russian central bank
Posted by Lars Christensen on December 16, 2014
https://marketmonetarist.com/2014/12/16/mencken-on-russian-central-bank/
The Market Monetarist- From excessively easy to excessive tight US monetary policy
- Re-visited: Firefighter Arsonists – the myth of the central bankers as ‘good’ crisis managers
- US monetary policy has become too TIGHT – the Fed risks significantly UNDERSHOOTING it’s 2% inflation target
- ChatGPT, Python, FRED and some NGDP gaps
- Re-visiting R*: Close to the end of the hiking cycle for the Fed
- US inflation set to fall sharply in the coming quarters
- Recession or not? Answering a question the Fed should not care about
- Milton Friedman commented on Powell’s Fed in 1978
- Carl Bildt is puzzled – he should read an economics textbook
- US domestic spending – a closer look at the 2021-22 data
The Market Monetarist 
Konstantin
/ December 16, 2014Lars, but where is the fine line between currency flexibility and financial stability?
Lars Christensen
/ December 16, 2014Konstantin,
I promise to write another blog post on exactly this topic. My short answewr is that monetary tightening than the cost of a short-term rise in inflation and distress for those institutions with foreign currency loans.
Christopher Mahoney
/ December 16, 2014Third World central banks need to worry about their currency because of original sin and/or dollarization. Because they lack a deep domestic capital market, the private sector–even the banks!–borrows in foreign currency and invests the proceeds in illiquid domestic assets. The Russian private sector has $600B in foreign debt, which is $200B more than its total reserves. Al of this is going to be defaulted on, and most of it is held by European banks.
james in london
/ December 17, 2014Great headlines about internal dissension amongst the governing elite inside Russia. Bring it on!
Cheerily going off to war in the Ukraine, with almost universal backing according to fairly independent polls, is now finding its nemesis.
But please don’t waste those US$ reserves defending the currency. Use them to help pay the US$ debts on time and in full.