The Creative Process of Government Destruction, by MN Gordon

The history of central banking is replete with unintended consequences, and that’s not going to change. From MN Gordon at

“History is a record of ‘effects’ the vast majority of which nobody intended to produce.”

– Joseph Schumpeter

Unintended Consequences

It was about a year ago when IMF Director Kristalina Georgieva took part in a panel discussion hosted by CNBC.  This may have been a fairly common occasion.  The conversation, however, was entirely uncommon.

Typically, central bankers are illusive in their remarks.  They speak in code.  They avoid potentially inflammatory words like recession.  Most certainly, they never use the D-word – as in depression.

They also generally avoid taking any responsibility for their mistakes.  What’s more, they position their failures as successes.

Ben Bernanke’s ‘courage to act,’ for instance.  What a bunch of baloney.

Deep inside central bankers must know the folly of planning an economy by stretching the money supply.  Still, they want to maintain the perception that they’re masters of the universe – and so, so much smarter than you.

With this in mind, it was in a moment of uncommon candor where Georgieva conceded that central banks globally created the inflation mess that exploded upon the world economy in 2022.  She also elaborated that this was because they printed too much money and didn’t think of unintended consequences:

“I think we are not paying sufficient attention to the law of unintended consequences.  We take decisions with an objective in mind and rarely think through what may happen that is not our objective.  And then we wrestle with the impact of it.

Continue reading


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.