I was actually wondering the same thing, because I read the article. Printing more money will simply push up prices further? It will lead to more dollars chasing the same supply of goods and services, in this case oil. This is the definition of inflation.
The real issue here is whether central banks will interpret spikes in crude prices as a consequence of them printing too much money i.e. inflation, or a factor of the demand and supply of crude inventories. If it is the former, and the central bank hikes interest rates, the increase in the rate will do very little to tackling "inflation".
I was actually wondering the same thing, because I read the article. Printing more money will simply push up prices further? It will lead to more dollars chasing the same supply of goods and services, in this case oil. This is the definition of inflation.
ReplyDeleteThe real issue here is whether central banks will interpret spikes in crude prices as a consequence of them printing too much money i.e. inflation, or a factor of the demand and supply of crude inventories. If it is the former, and the central bank hikes interest rates, the increase in the rate will do very little to tackling "inflation".
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