European Central Bank President Christine Lagarde laid out a twisted diagnosis and a prognosis for the global economy in her speech yesterday at Jackson Hole, the annual central banker jamboree in Wyoming, hosted by the Kansas City Federal Reserve. This year’s conference theme is, “Structural Shifts in the Global Economy.”
Lagarde’s speech was titled, “Policy Making in an Age of Shifts and Breaks.” Her hairball of a description of today’s financial-economic situation is: We have inflation caused by supply shocks (and not by monetary policies, nota bene), to which central banks have reacted with ... cutting more supply (by higher interest rates). To save the planet, she said, we will implement policies that produce more supply shocks and inflation—therefore, we will curb supply further (with more interest rate hikes). And by the way, we will have to spend a lot for rearmament.
Lagarde uses twisted lingo to present her twisted analysis. These are selected exact quotations:
• “Climate change is accelerating, compelling us to do all we can to decarbonize the economy.”
• “We are already witnessing the effects of accelerating climate change, and this will likely translate into more frequent supply shocks in the future. More than 70% of companies in the euro area have been estimated to be dependent on at least one ecosystem service.”
