Panic over inflation?

The Reserve Bank and the Government seem to be close to panic over inflation. They seem to have realised they have allowed inflation to get too high, and waited too long in taking action.

Hence their proposals yesterday to start interfering with banks operations. To say the proposals have had a luke warm reception would be gross under-statement.

John Key said the proposals risk “a complete implosion of the economy”.

ANZ National chief economist John McDermott said the moves looked “absolutely insane”.

David Tripe of Massey University’s banking studies centre said the options had the “face of Muldoon all over them”

Personally I agree with David Tripe that not even the Government is this stupid that they would try to return us to Muldoonism. But you can never say never.