Control Reversal

There’s a well known phenomenon in aerodynamics in which a plane’s flight controls appear to do the opposite of what is intended. This can happen at high speed, for example. (I have a vague memory of a movie supposedly about Chuck Yeager breaking the sound barrier, and there being a tense moment in which our hero had to decide which way to move the controls. Should he pull them the traditional way as advised by all his colleagues? Or do the opposite as his instinct said? Obviously he followed his instincts! I don’t know how true any of that is!) This inspires the obvious thought…

Raise interest rates.

I’m not suggesting that there is any link between economics and aerodynamics. And my position on economics has been documented. So don’t necessarily believe anything I say on the subject. However, there can be no doubt about the pointlessness of continuing to decrease interest rates. It has become a joke; 1%, 0.5%,… This strategy is about as effective as a visit to a witchdoctor.

If governments are in the business of bailing out more and more banks, and if they are about to start printing money/quantitative easing then raise interest rates at the same time. Bring back some semblance of normality for the man in the street.

P

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