{"id":1485841,"date":"2024-08-25T13:20:00","date_gmt":"2024-08-25T17:20:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1485841"},"modified":"2024-08-25T13:20:00","modified_gmt":"2024-08-25T17:20:00","slug":"taylor-swift-could-derail-the-global-battle-against-inflation-ubs","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/taylor-swift-could-derail-the-global-battle-against-inflation-ubs\/1485841\/","title":{"rendered":"Taylor Swift Could Derail The Global Battle Against Inflation; UBS"},"content":{"rendered":"

Taylor Swift Could Derail The Global Battle Against Inflation; UBS<\/span><\/p>\n

\n

Via SchiffGold.com,<\/em><\/a><\/p>\n

Just when you thought the headlines couldn\u2019t seem more absurd,<\/strong> Swiss banking giant UBS has issued a warning that in the global battle against inflation, the worst enemy of central banks could be none other than\u00a0pop star Taylor Swift<\/a>.<\/strong><\/p>\n

<\/a><\/p>\n

The report could be seen as one part genuine economic analysis, one part marketing schtick for the UBS Arena.<\/strong><\/p>\n

This is the chosen venue for many huge events including\u00a0Taylor Swift concerts<\/a>\u00a0and the MTV Music Video Awards.<\/p>\n

However, the underlying point is that sudden spikes in demand make it harder for central bankers to use monetary policy tools to cool inflation.<\/strong><\/p>\n

UBS economist Paul Donovan describes in his report how huge events that draw attendees from all over the world \u2014\u00a0such as Taylor Swift shows<\/a>, which draw masses of screaming Swifties who flood cities around the world to see their favorite star \u2014 create demand shocks.<\/p>\n

These are especially noticeable in industries like travel and hospitality when a sudden influx drives up prices at hotels, restaurants, airlines, taxis, and similar services.\u00a0Donovan says<\/a>:<\/p>\n

\u201cHotel prices will often rise for accommodation near a mega event venue. Transport costs (in particular air fares) may also increase. The measurement method for these prices is more likely to capture the unusual and transitory pattern of demand, and it is here that the increase in consumer price inflation takes place.\u201d<\/em><\/p>\n

It isn\u2019t so much that UBS is wrong. Sudden increases in demand drive up prices.<\/p>\n

But the large point is how the notion itself lays bare the total absurdity of the global economy, and the nonsensical notion that a handful of central planners is able to micromanage\u00a0global inflationary pressures<\/a>.<\/strong><\/p>\n

Are Taylor Swift concerts really enough to move the needle on global inflation and derail monetary policy efforts?<\/p>\n

Eurozone inflation and PMI got a boost this month, but it was entirely artificial \u2014 caused by the fact that\u00a0France hosted this year\u2019s Olympic Games<\/a>. The surge in economic activity created a massive but entirely transitory increase in demand, dragging up Eurozone economic data points. Meanwhile,\u00a0fundamentals remain weaker<\/a>, and major Eurozone economies outside of France continue to contract, fueling motivation for the ECB to return to cutting interest rates again next month.<\/p>\n

Euro Area Inflation Rate<\/em><\/p>\n

<\/a><\/em><\/p>\n

Source<\/a><\/em><\/p>\n

However, with interest rates already too low to properly get inflation under control (with or without Taylor Swift and the Olympics), a rate cut will only push high prices even higher for Europeans. <\/strong><\/p>\n

And in countries like\u00a0France, with high debt and unsustainable spending<\/a>, there\u2019s an increasing chance of a real debt crisis that ripples through the rest of Europe.\u00a0<\/p>\n

Even in countries like Germany\u00a0where debt-to-GDP ratios<\/a>\u00a0are lower this year, contracting economies keep signaling trouble. <\/strong><\/p>\n

For better or worse, none of this is Taylor Swift\u2019s fault, so Swifites are off the hook \u2014 but the same can\u2019t be said for central banks.\u00a0<\/strong><\/p>\n

All the ECB, the Fed, and other central banks know how to do is print money, locking countries into boom and bust cycles as they tinker with the money supply and set interest rates that the free market would never have settled on naturally.\u00a0Central banks don\u2019t create real or sustainable growth<\/a>.<\/p>\n

The bankers would love to be able to\u00a0blame Taylor Swift<\/a>\u00a0or the Olympics for economic crises. But these busts arise from, and are made even worse, by their own monetary tinkering and government intervention.<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSun, 08\/25\/2024 – 09:20<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/economics\/taylor-swift-could-derail-global-battle-against-inflation-ubs<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Taylor Swift Could Derail The Global Battle Against Inflation; UBS Via SchiffGold.com, Just when you thought the headlines couldn\u2019t seem more absurd, Swiss banking giant…<\/p>\n","protected":false},"author":0,"featured_media":1485842,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1485841","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1485841","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1485841"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1485841\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1485842"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1485841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1485841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1485841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}