The topic of inflation is one that affects everyone, and the current trend of inflation is proving to be worrisome, with some countries flung into economic crisis while others seeing large-scale protests and even regime change, will there be a solution in sight? Krzysztof Piech, Economist from the Faculty of Economics and Management of Lazarski University joined TVP World to discuss the cause, the trend and possible solutions to the economic woe.
The inflation crisis that stemmed from the USD and EU area has gone global, a phenomenon that is to be expected at the beginning of the pandemic, argued Mr Piech, as it is the natural consequence of the economic policies pursued by the countries in an attempt to curb the pandemic.
The consequences of the enormous money supply being added to the circulating market are now approaching the unfortunate logical conclusion: stagflation and recession. The monetary policies taken during the pandemic exacerbated by the current energy crisis as a result of Russia’s war in Ukraine, are taking effect on the global economy.
When asked about the banks’ manoeuvre in issuing bonds to recapture currency, Mr Piech said that it is a good idea, albeit a risky one, as it is not a permanent solution, and the move can only come out on top to subsequently be considered clever if the bonds will be bought back, which is a very costly move to take.
Reiterating that the world as a whole is now experiencing the consequences of past monetary policies, and as such needs to be aware of future plans, the economist stressed that the increased currency supply has a much bigger role to play than the energy prices that are commonly perceived as the reason for inflation. He added that oil prices are relatively easy to combat if compared to the attempts at recapturing the currencies that have been distributed on a mass scale.
TVP World’s guest proceeds to shed light on China’s role in the currencies of the dollar and the euro, as well as the possibility of threatening the USD as the reserve currency of the world, before delving deep into the reason why the euro is coming to parity with the USD and why the exporting of inflation to the rest of the world by the two economic bodies made the problem worldwide.
The guest touched upon the silent alliance between Saudi Arabia and Russia, and the dangers of a global anti-democratic alliance emergence. He concludes that the monetary policies that the West has pursued do not make a long-term solution, and the continuation of kicking the can down the road will eventually have to stop before the can gets too heavy by the burdens picked up along the way.