Praise for central banking

Dr G Gono offers some timely praise for the way the US and UK central banks have been handling the current financial crisis.

As Monetary Authorities, we have been humbled and have
taken heart in the realization that some leading Central
Banks, including those in the USA and the UK, are now not
just talking of, but also actually implementing flexible and
pragmatic central bank support programmes where these are
deemed necessary in their National interests.

From a man clearly qualified to comment.

6 thoughts on “Praise for central banking

  1. In case anybody is too lazy to click on the links… Gono is the head of the Zimbabwe reserve bank, which has run excessively loose monetary policy leading to hyper-inflation.

  2. I have had a feeling for some time that Gono was not Rothbardian, Hayekian, or even a follower of the classical liberal mindset. Terje, don’t let this mans influence fool you into supporting the bailout.

    On the serious side though, he shows an interesting affinity with the ideas of central bankers in the current situation. We might be able to get through the crisis, but can we handle the solution?

    I loved the stuff about: –

    Even though our efforts have been criticized and derided clearly for undisguised political reasons, we are proud that we had the courage to do something that made a positive difference when it would have been far too easy for us to appear reasonable by doing nothing and thereby make the situation worse.

    As Monetary Authorities, we commend those of our peers, the world over, who have now seen the light on the need for the adoption of flexible and practical interventions and support to key sectors of the economy when faced with unusual circumstances.

    Of course, in the short-term such interventions are without doubt inflationary but in the medium to long-term they trigger and propel economic growth and development that everyone craves for.

  3. If inflation was a measure of central banker success this guy would be several rungs above God. The fact that he can even bothered to write this guff suggests he maybe even believes it. Sad really.

  4. I am afraid I tend to be cynical enough to think that none of them really believe what they are saying. My opinion is that;

    (a) They don’t have much idea of what to do other than formulaic stuff, and ….

    (b) They justify it by saying whatever they think will make the public think they do know what they are doing.

    John Singelton once referred to Howard being handed his budget by a treasury guy with the words, “You had better read this John, you are saying it tonight.”

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