— The stagflation outside of the United States will be very serious as capital flight to safety causes severe debt and foreign exchange crises in many parts of the world and developing countries face imported inflation due to the strong U.S. dollar, said economist Jayati Ghosh.
— The U.S. dollar hegemony, which has been so crucial in the United States’ own economic expansion, is going to become much more fragile in the future. There’s no question that an increasing number of countries and central banks “are going to think of alternative ways of keeping their reserves and it’s obvious it’s the logical thing to do,” she said.
U.S. Federal Reserve chairman Jerome Powell said his goal is “to get wages down,” complaining workers have too much power in the labor market. Economist Michael Hudson says this is “junk economics,” and corporate monopolies are driving inflation, not wages.
SYDNEY and KUALA LUMPUR: Central bank policies have often worsened economic crises instead of resolving them. By raising interest rates in response to inflation, they often exacerbate, rather than mitigate business cycles and inflation.