Sat. Oct 23rd, 2021

Letter updates

Premature interest rate hikes are always and everywhere a phenomenon with a high net worth.

Sir Andrew Cook criticizes the major central banks in the world for throwing ‘the cardinal rules’ of the stability of fiat currencies into the wind (Letters, FT weekend, September 4).

The cardinal rules appear to be from Cook’s own invention. They do not refer to Walter Bagehot’s centuries-old crisis lending or the consensus on inflation that has been directed for the past 30 years.

Rather, it seems that Cook set it up to imply that global monetary policy was too loose after the global health crisis. Like the gold standard orthodoxy of the 1920s or the austerity champions of the 2010s, asset owners like Cook seem to favor deflation and value preservation over inflation and economic activation.

Not surprisingly, but hardly relevant to a debate on macroeconomic policy.

Larry Kramer
New York, NY, USA

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