Economists, both left and right (heck any 2nd year econ student) will tell you this is a recipe for big inflation.
Lefty economists think central authorities should have more power, more wiggle room to print money, and should increase and decrease money supply to prevent bubbles
The righties want them to have less power to print money. (Because gov’t always gets it wrong and will always be tempted to print too much.)
But this . . .
What Turkey did . . .
Absolutely insane.
By Baris Balci
December 4, 2023 at 2:02 AM EST
Updated on December 4, 2023 at 3:29 AM EST
Turkey’s consumer inflation accelerated to its highest level this year as household energy use exceeded state support for natural gas consumption.
Prices rose an annual 62% through November, less than the median estimate of 62.6% in a Bloomberg survey of economists. Monthly inflation was 3.28%, Turkey’s state statistics bureau said, with housing including gas bills the leading contributor.
Colder weather has pushed household gas use beyond the volume promised by President Recep Tayyip Erdogan before May elections. The gas giveaway covers up to 25 cubic meters per month – about half of average household consumption at this time of year.
What Bloomberg Economics Says…
Turkey’s slow inflation gain for November is a temporary respite, with the battle against high prices still far from over. We maintain our view that price gains will peak at 73% in the second quarter of next year. Risks to this view are tilted to the upside, based on strong underlying trends and a likely stimulus boom ahead of local elections in March. . . .
But even as monthly hikes since June have nearly quintupled the key rate to 40%, it remains deeply negative when adjusted for current prices. Real rates are now above zero relative to projected inflation at the end of 2024, a gauge that’s preferred by policymakers when talking about monetary tightening. . . .
