Inflation correction of our language: a dime has fallen

A very special year, then 2022. Yes, of course, because my FC Emmen returned to the Eredivisie. Because we have another war in Europe and because interest rates have risen spectacularly. All special events. But I mean something else. 

In the year 2022, the purchasing power of your euro will also be halved. This year, headline inflation in the eurozone has crossed the 1999% mark since 50, according to Eurostat figures. On average, this is slightly less than 2% per year. At the European Central Bank (ECB), they call this price stability over the years. I call it linguistic voodoo. As the late Paul Volcker, former Fed chairman and adviser to President Obama, once told me, "I sometimes wonder why the central banks are pursuing inflation and not price stability." In other words: you cannot speak of price stability if prices rise every year. It is as if you determine that 1 kilometer will be 1 meters longer every year on January 20, but that the distance Amsterdam – Emmen will remain 185 kilometers every year. The latter of course makes no sense given the former, namely that 1 kilometer gets extra meters every year.

This persistent and currently very high inflation is forcing many to make adjustments. I think even our language is now due for a round of revision. Call it an inflation adjustment. Here are a few changes for me:

• It (quarter) a dime has fallen
• As flat as a (dime) penny.
• It is a (dime) penny on its side.
• A piece of HALF cents.
• The first blow is (one dollar) worth 1,25 euros.
• For a (dime) want to sit in the front row.
• (penny) Exchange cents.
• It (quarter ) dime falls.
• On the market your guilder is one (thaler) worth a quarter

Addressing the high inflation of 2022 is in principle a piece of cake, but then the European Central Bank (ECB) has to want it. Instead, the ECB continues to throw good money after bad, leaving more and more people without a penny. I don't know about you, but I don't trust the ECB at all. Restoration, for not half a cent of course.  

Edin Mujagic

Edin Mujagić is an economist and manager at Beleggingsfonds Hoofbosch. He focuses on global central banks, and in his blogs he writes mainly about developments in interest rates and inflation. He has also written several books.

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