Final Word from Thursday, April 5, 2018

It will be a year tomorrow since the Czech National Bank ended its intervention regime, but the Kč 2 trillion it created out of thin air to devalue the crown over 41 months is still sloshing around. CNB Gov. Jiří Rusnok routinely talks about the overheating of the economy and points to the imbalances on the labor market and in wages, but he invariably glosses over the CNB's role in creating these imbalances. One of the stated goals in Nov. 2013 was to help exporters boost revenue and create jobs, and locking in low wages at a fixed exchange rate did indeed do this. Rusnok declared a sort of Mission Accomplished a year ago. But as wages skyrocketed and the crown appreciated, some of these same exporters began to lose contracts. And the CNB hasn't even started to withdraw its Kč 2 trillion in extra crowns. Exporters can only hope that once it does and the imbalances deepen, Rusnok's Mission Accomplished won't turn out like Bush's in Iraq and Putin's in Syria. [Czech Republic quantitative easing George W. Bush Vladimir Putin Russia United States U.S. war depreciation devaluation]

Glossary of difficult words

out of thin air - from nothing; from nowhere;

to slosh (around) - (of liquid in a container) to move irregularly with a splashing sound; (of money) to be present and available for spending;

to gloss over - to try to conceal or disguise (something unfavorable) by treating it briefly or representing it misleadingly.

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