Government Monetary Policy Sucks

and post COVID "energy transition" results won't be any different.

At The Last Refuge, Sundance is proposing that the world’s monetary authorities have a strategic plan to manage inflation during the energy transition.

[The Fed] will not admit the Biden energy program is the source of the inflation Powell is targeting with his policy moves to shrink energy demand.

I don’t know what the monetary authorities really think. But my judgement of monetary policy over the last few centuries is that monetary authorities don’t have a clue. Basically their job is to help finance wars, and after the wars are over, try to patch things back together again.

I’m sure that, deep in the bureaucracies, there are plans to deal with the energy transition to green energy. But my nickel says that the plans aren’t worth the paper they are printed on.

So, what I would expect is that the monetary authorities will treat the energy transition like a war. Their governments will borrow as much as they can and then the monetary authorities will make up the difference with printed money.

But my guess is that things will rapidly get much worse than the bureaucratic planners allowed for. We can see that, for example, with the developing energy nightmare consequent upon the Ukraine War and the reduction of natural gas shipments from Russia to Central Europe.

A disinterested observer might ask what on Earth the politicians thought they were doing getting tied up with Russia. But then, one might also ask what on Earth Chancellor Merkel thought she was doing when she did a deal with the Greens to shut down Germany’s nuclear plants.

And one might ask why anyone is proposing an energy transition without first building a fleet of nuclear plants to charge all those electric cars.

Never mind. The main point is to understand that the monetary bureaucrats are clueless.

My list of monetary cock-ups includes:

• Brit resumption of pre-war gold price parity after the Napoleonic War. Lots of riots and stuff.

• US resumption of pre-war gold price parity after the Civil War. Lots of strikes in the wake of the Crash of 1873.

• US mismanagement of the Alaska Gold Rush resulting in the Crash of 1907.

• US and Brit resumption of pre-war gold price parity after World War I. Plus punitive reparations imposed on Germany. Strikes and the Crash of 1929 and the Great Depression. And the H-word.

• Incompetent handling of the end of the 1944 Bretton Woods monetary regime in 1971 when the US stopped pretending it was still on the gold standard and we had ten years of nasty inflation.

• US initial failure to have Fed act as “lender of last resort” in September 2008 when Lehman Brothers failed.

• Money printer go brrrr response to COVID lockdowns.

• Current flatlining of M2 since December 2021.

My estimate is that US monetary and energy and fiscal policy over the next decade will be judged by the historians of the next regime to have been an utter failure that visited horrific suffering on the American people.

I don’t have any data or science to back that up. Just the record of dullness and stupidity over the last 200 years.

Because basically the monetary authorities are just bureaucratic yes-men. Job One is to accomodate wars and sudden expansions of government spending. Job Two is to try to get out of the subsequent mess somehow so that the regime can survive and write the history of its glorious success.