Quote of the day:
. . . Low inflation does not cure all ills. But higher inflation helps nobody (except property speculators). It doesn’t even stimulate employment as we used to believe, except briefly by temporarily cutting real wages.
And while printing money or drastically easing monetary policy might get the exchange rate down, we know from bitter experience that this provides only temporary relief for exporters as higher inflation quickly offsets the benefits of a lower exchange rate.
For decades we could compete on international markets with the New Zealand dollar at US$1.12. Now we can’t because too often we listened to those who argued for just a bit more inflation. . . Don Brash.
A bit more inflation is like a bit more pregnancy. It keeps growing, then it produces a baby and the baby keeps growing too.