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Central bank “policies” these days are in many ways so comical that they remind me of some of the classic old Monty Python sketches. You can almost imagine how they might pen a sketch today involving central bankers. John Cleese would clearly have to be the Central Banker with maybe Eric Idle as the Saver! Let me introduce you to our “Central Bank Sketch”.
Scene: A lavishly appointed building in a major finance centre. A person is standing nervously outside a door marked “Central Bank”. They hesitate briefly, then knock:
Central Banker (CB): Come in!
Saver: Good morning, I’d like to talk to someone about my savings.
CB: Excellent, we central bankers encourage savings.
Saver: Oh, well I’m glad to hear it. You see I’d like to save some money by depositing it at my bank but, after allowing for inflation, the rate of interest I receive means I’d actually be losing money!
CB: Yes, wonderful, isn’t it?
Saver: What? How can that be wonderful?
CB: Because you are thereby disincentivised from saving.
Saver: But I thought you said you were in favour of savings?!
16 August 2021
A Central Bank Sketch
Central bank “policies” these days are in many ways so comical that they remind me of some of the classic old Monty Python sketches. You can almost imagine how they might pen a sketch today involving central bankers. John Cleese would clearly have to be the Central Banker with maybe Eric Idle as the Saver! Let me introduce you to our “Central Bank Sketch”.
Scene: A lavishly appointed building in a major finance centre. A person is standing nervously outside a door marked “Central Bank”. They hesitate briefly, then knock:
Central Banker (CB): Come in!
Saver: Good morning, I’d like to talk to someone about my savings.
CB: Excellent, we central bankers encourage savings.
Saver: Oh, well I’m glad to hear it. You see I’d like to save some money by depositing it at my bank but, after allowing for inflation, the rate of interest I receive means I’d actually be losing money!
CB: Yes, wonderful, isn’t it?
Saver: What? How can that be wonderful?
CB: Because you are thereby disincentivised from saving.
Saver: But I thought you said you were in favour of savings?!