Inflation in Sri Lanka hits its highest level in 4 years in October 2021, food up 24% over 2 years


ECONMYNEXT – Sri Lanka’s inflation in the 12 months leading up to October 2021 jumped to 7.8%, the highest since October 2017, data showed amid domestic and US monetary policy corruption.

Colombo’s widely watched consumer price index jumped 1.9% in October to 146.9 points as some foods that were kept under price control underestimating inflation in previous months were been officially allowed to increase.

Food prices rose 2.8% in the month and 12.8% in the past 12 months.

Food prices rose 24.1% in two years thanks to local money printing and the Fed.

Sri Lanka has been printing silver at unprecedented volumes since February 2020, and the soft parity of the rupee to the US dollar has officially increased from 182 to 203 in the past two years.

Analysts had warned that Sri Lanka had for several years conducted an unanchored monetary policy with “flexible” inflation targeting (a discretionary domestic anchor) coupled with a “flexible” exchange rate (a highly discretionary external anchor).

The unembedded discretionary policy was likely illegal and violates Section 5 (a) of the central bank’s constitution, economists and analysts have warned, as the consequences of such a policy become clear repeatedly.

The unanchored policy coupled with a high inflation target of up to 8% was also included in an International Monetary Fund program, where the currency collapsed under the program and the 8% target.

Senior politicians have cited money printing in the United States as a justification for printing money in their country, amid a resurgent corruption of global monetary policy by mercantilist academics.

The US Fed is triggering another bubble in commodity and asset prices, possibly the worst since the Greenspan-Bernanke bubble that collapsed in 2008.

Mainstream economists have said that US Fed chief Jerome Powell is delusional in claiming that there is no link to money supply and inflation and that price spikes are “transient.”

Sri Lanka is aiming for a national index between 4 and 6 percent, which has more non-market services than a previous index.

After following an index with less commodities traded, allegations were made in Sri Lanka that there is no connection between inflation and currency depreciation as had been the case in the past.

The European Central Bank and others have also jumped on the bandwagon. However, the more cautious banks are expected to toughen their policies.

The US Fed prints money to create jobs under its so-called “dual tenure” given to it by the 1946 US Jobs Act at a time when Keynesianism was at its height. generating global instability and the eventual collapse of the Bretton Woods system and the age-old gold standard to control the issuance of money.

“It was John Maynard Keynes, a man of great intelligence but limited knowledge of economic theory, who finally succeeded in rehabilitating a vision long reserved for eccentrics with whom he openly sympathized,” wrote FA Hayek, a classic economist.

“The claim of a prominent public figure and a brilliant polemicist to provide an inexpensive and easy way to prevent serious unemployment on a lasting basis won over public opinion and, after his death, professional opinion as well. (Colombo / October 30/2021)


Source link

Previous Last chance to score these two Marriott Bonvoy welcome bonuses
Next Coachella Valley Tories strike the ground

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *