Francis Schutte

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

The action of volcker on the Money supply should also be commented.

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

NOT true: But if the Iceland authorities now put rates high enough, they will kill the inflation stone cold dead. It won't!

Monetary inflation is the result of the creation of Fiat Money out of thin air. Monetary inflation ALWAYS results into a price inflation whatever the level of interest rates is...
History shows this over and over again: Weimar, Zimbabwe, the Civil war in the USA, the american independence,...Please make your home work and get a good history book.

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

The latest figures of M1, M2 and M3 show an Increase rather than a decrease. There is NO massive decrease of M3. Authorities are in NO position to decrease the Money supply. On the contrary, they are now using the Deflation propaganda to continue to increase the total Money supply...

The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)

At this time, in the USA the Velocity of money is falling. This is a normal phenomenon as people start to stop spending in expectation of falling prices. The day Velocity picks up again it will because people will realize Inflation is here to stay and will get worse. This action will lead us into hyperinflation.