Furthermore, if there's any branch of government that to me seems to be populated by actually intelligent people, it's the central bank.
Not everywhere, but that does seem to generally be the case, and when it isn't, it's pretty obvious - e.g. Turkey.
erdogan selfappointed himself as central bank manager, do not undermine the work of the actual experts
Re:The digital currencies that matter
by imtringued on Saturday May 08, 2021 @07:40AM
(#27086201)
Yeah, Turkey is pretty much a go to case for "Don't trust the government, trust the central bank".
What Erdogan should do is to support the agriculture sector and help it provide enough food for everyone.
By forcibly lowering interest rates he is actually cutting off financing for the most productive companies. High interest rates are supposed to drive out unproductive companies and make it harder for them to acquire financing.
If the agriculture sector is highly productive (indicated by rising food prices) then it will automatically obtain more funding and other companies will have to downsize, which makes more resources and workers available to agriculture companies.
Banks have a profit motive and therefore keep trying to do things which value instant reward over stability.
Governments (when not corrupt) are motivated by the actual success of the nation as a whole rather than individual sectors. They mostly only need to care about short-term wins for elections.