{"id":20120,"date":"2016-04-21T20:14:34","date_gmt":"2016-04-22T01:14:34","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20120"},"modified":"2016-04-21T20:15:46","modified_gmt":"2016-04-22T01:15:46","slug":"20120","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20120","title":{"rendered":"Why Mario\u2019s Got A Bee In His Bonnet"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/davidstockmanscontracorner.com\/why-marios-got-a-bee-in-his-bonnet\/\">Why Mario\u2019s Got A Bee In His Bonnet<\/a><\/h3>\n<p class=\"entry-meta\">Mario had a bee in his bonnet this morning. Apparently, the chorus of German voices pointing to the obvious\u2014-\u00a0that his policies are killing savers, insurance companies, pension funds and banks\u2014-got his dander up:<\/p>\n<\/header>\n<div class=\"entry-content\">\n<div class=\"pf-content\">\n<blockquote><p>\u201cWe have a mandate to preserve price stability for the whole of the euro zone, not only for Germany,\u201d he said. \u201c<em><strong>We obey the law<\/strong><\/em>, not the politicians, because we are independent.\u201d<\/p><\/blockquote>\n<p>There you have in brief the whole rationalization for the monetary madness that Draghi and his kindred central bankers have unleashed\u00a0on the world. They claim that their rubbery statutory mandates to pursue the equivalent of\u00a0economic apple pie, such as \u2018price stability\u2019, leads in a straight, unbreakable\u00a0line of logic and monetary science to the lunacy of\u00a0negative 0.4%\u00a0money market rates and $90 billion per month of bond-buying.<\/p>\n<p>No it doesn\u2019t.\u00a0 There is no scientific linkage whatsoever\u2014\u2013just an ideological leap based on a Keynesian demand model that conveniently delegates all power to the central bankers\u2019 soviets.<\/p>\n<p>Just as in the case of the Humphrey-Hawkins Act in the US, the ECB\u2019s enabling statute does not define price stability in quantitative terms\u2014-nor does it specify the inflation index to be used or the duration to be measured. Even when the\u00a0ECB\u2019s Governing Council attempted to formulate a quantitative definition of \u2018price stability\u2019, it only got slightly more specific in defining it as something between\u00a0<em><strong>zero and 2%<\/strong>\u00a0<\/em>over the course of a year.<\/p>\n<blockquote><p><strong>\u201cPrice stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%.\u201d<\/strong><\/p><\/blockquote>\n<p>By its own definition, therefore, the eurozone does not have a \u201cdeflation\u201d problem or even a \u201clowflation\u201d threat. For the last 16 years, the core HICP has averaged<strong>\u00a01.5%,<\/strong>\u00a0and during the last year when allegedly the deflationary sky was falling, the core consumer inflation index has risen by<strong><em>\u00a01.0%.<\/em><\/strong><\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why Mario\u2019s Got A Bee In His Bonnet Mario had a bee in his bonnet this morning. Apparently, the chorus of German voices pointing to the obvious\u2014-\u00a0that his policies are killing savers, insurance companies, pension funds and banks\u2014-got his dander up: \u201cWe have a mandate to preserve price stability for the whole of the euro [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5979,2120,233,282,359,13585,467,1044,827],"class_list":["post-20120","post","type-post","status-publish","format-standard","hentry","category-economics","tag-contracorner","tag-david-stockman","tag-ecb","tag-european-central-bank","tag-germany","tag-humphry-hawkins-act","tag-keynesian-economics","tag-mario-draghi","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20120"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20120\/revisions"}],"predecessor-version":[{"id":20122,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20120\/revisions\/20122"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}