I've been screaming this for years, but nobody will listen. You don't fix inflation by making yet ANOTHER thing more expensive, particularly when that thing--capital--is a basic economic input just like fuel, steel, etc. They have the causal relationship backward. Inflation CAUSES higher interest rates, since I'll demand more return if I know the dollars I'll eventually be paid back in will be worth a lot less than the dollars I lent out. This is so simple only highly credentialed economists seem capable of misunderstanding it.
I've been screaming this for years, but nobody will listen. You don't fix inflation by making yet ANOTHER thing more expensive, particularly when that thing--capital--is a basic economic input just like fuel, steel, etc. They have the causal relationship backward. Inflation CAUSES higher interest rates, since I'll demand more return if I know the dollars I'll eventually be paid back in will be worth a lot less than the dollars I lent out. This is so simple only highly credentialed economists seem capable of misunderstanding it.