“Magic money is the victim of a terrible disillusion”

LCurrency stories always end badly. After years of enchanted exuberance, here is the “magic” currency called to account to hysterical inflation. Central banks need to turn off the tap, too. Because to prevent prices from skyrocketing, you have to prevent people from buying.

This is the only parade available to central banks to fight against inflation. The ultra-accommodative monetary policy must therefore change gear to become restrictive? We are not there yet, but the free and abundant money is over.

So magic money was just hot air? Pipe? This money that was said to be available at will, in unlimited quantities, making it possible to finance anything and everything… Could we have been lied to? Doesn’t money then grow back once picked?

Our ability to swallow nonsense will not surprise anyone, but there we have done well. It must be said that this belief in the magic money had many virtues, since it authorized very welcome miracles: making the debts climb to the sky (financing of the ” no matter what “), transform lead into gold (repurchase of the Italian debt).

The illusion of infinite resources

Alas, magic money is the victim of a terrible disillusionment. No, monetary resources are not inexhaustible. Their available stock depends on the goodwill of inflation. As long as inflation remained wise, lurking in the shadows, not absent but quiescent, the central banks had free rein to run the printing press, which they did without complex. But today, supercharged inflation no longer allows central bank money to flow greedily into the economy and the markets.

Nothing new really. The illusion of infinite resources is not its first feat of arms. The “small” climatic problems that we are experiencing are another illustration of this…

Read the column: Article reserved for our subscribers The “helicopter money fable”

But the first victim was logic, the one we use every day to reason, and which dates back 2000 years already: it is called classical logic. She too was lulled by the illusion of the infinite resource.

Sometimes it works. If I say “Paul eats an apple” then, again, “Paul eats an apple”, I say the same thing twice. I could say it an infinite number of times, it wouldn’t change much: Paul only ate an apple. In classical logic, we have the right to repeat an expression or a statement as many times as we want, to use and reuse an axiom or a hypothesis for a demonstration, it is not exhausted for all that. Resources can be used at will, there is no limit.

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