There’s more to the Wheat crisis than just the Russian-Ukrainian war
To understand the current international apprehension over the wheat stocks blocked in Odessa, one needs to know that together Russia and Ukraine produce 14% of the world's wheat. But the steep rise in the prices of agricultural products began well before the conflict in Eastern Europe, due to the rush to stockpile by some countries after the pandemic and the forecasts of a decrease in world production.
The central banks have succeeded. Inflation is back
By injecting huge amounts of liquidity created out of thin air into the economy, inflation has exploded. It’s the "medicine" the central banks are dishing out to reduce the real value of uncontrolled debts. The bill will be paid by the middle and lower middle classes, from small savers to the holders of fixed incomes: wages, salaries and pensions. And "financial socialism" takes another step forward.
Statism, globalism, ecologism: ideologies that destroy people
Catholic Social Doctrine is a veritable antidote to the ideologies currently dominating economic policies. This is also true in terms of how the Covid pandemic has been handled, giving rise to both a new form of centralised government and an "open society". It is true also in terms of the ecological movement, which has now become a new religion and the cause of injustices harming the poor. It also holds true for economic "degrowth" which smacks of dangerous utopian ideals and reminiscent of centuries-old heresies involving pauperism. Finally, Catholic Social Doctrine is an antidote to globalism, a distortion of true fraternity. Below, we publish some the main points from Archbishop Giampaolo Crepaldi's talk given at the third annual Catholic Social Doctrine conference in Lonigo (Northern Italy).
Inflation, a hidden tax and no help to any crisis
Those who live on fixed incomes - wages, salaries, pensions – during times of high inflation, see their purchasing power erode over time. And yet the central banks, starting with the United States Federal Reserve, are definitely aiming at inflationary models, believing that they can help the state and companies overcome crisis by devaluing their debts. Unfortunately this is a tragic illusion and we will pay dearly for it.
Let's cry for Argentina. One default after another, a lesson for populists
Argentina has run the risk of its ninth default, which was avoided at the last minute only by an agreement with creditors. There remains the grave problem of the credibility and holding of public accounts. It is a lesson for Italy: we are not all that different. The Daily Compass speaks with economist Michele Boldrin
Printing money kills enterprise
Monetary expansion distorts entrepreneurial competitiveness because it concedes enormous power to companies that have easier access to liquidity. This is why entrepreneurs tend to disappear and why companies in the hands of finance tend to multiply.
Expansive monetary policies kill savings and responsibility
For years, it seems that the only way to resolve economic crises is by central banks issuing new liquidity. However, this continuous creation of money “out of thin air” has negative ethical implications. It damages individuals and social cooperation.
Capitalism is the best solution to global poverty
Before the dawn of capitalism roughly 200 years ago, 90% of the global population was living in extreme poverty. Today, that figure has fallen to just 10%, above all for the improvements of the last 35 years. Also life expectancy has increased. Paradoxically China is an example of the superiority of capitalism: all the progress in China over the past 40 years is due entirely to the fact that the Chinese have progressively introduced the principles of free markets and private property ownership.
With financial industries up and economies down, savers will pay
Financial industries are soaring amid sinking economies. "Economic financialization", with rivers of fiat money flowing out of central banks and pumped into global markets, underscores the imbalance existing between financial and real market dynamics. We are quickly moving toward "financial socialism" which will end up destroying what little is left of our freedom and economic responsibilities. But can we stop it?
Coronavirus: billions of people will go back to poverty
At least one thing is certain in the world economy and is evident now that the peak of the coronavirus pandemic has been reached: 22 years of rapidly growing global economic prosperity have been wiped out in just two months. Does it mean this is the end of the free market, theorized by Adam Smith since 1776? Will it be the start of a New Chinese Order?
A universal basic wage for everyone? Good intentions are not enough
There are definite limits to a universal basic wage as proposed by Pope Francis for members of the World Meeting of Popular Movements. It would be absurd to seek an increase in public welfare to citizens when national GDPs are suffering and in freefall. When fewer payrolls and invoices are issued, equally fewer taxes are deposited into national treasuries that go to support the various types of "social security." The solution once again falls to markets, provided they’re not blocked not just by viruses, but neither by corruption, crime, high taxation and every strain of political-economic contagion.
Socialism’s erroneous solution to the pandemic
Before the unexpected COVID-19 phenomenon, the global economy was already very fragile due to the hyper-activity of central banks, skyrocketing public debt and because of boom (illusory) and bust (real) economic cycles. In the wake of the pandemic, these worrisome trends have led nations to enact a sort of “wartime socialism” to resolve the economic crisis. Yet is it the only solution?
