The “Stupidity of the Week”-award for the week that I was gone is hereby awarded to the 376 Members of the European Parlament (MEP:s) who thinks that inflation should be fought by replacing the one and two euro coins with bills.
Having one bills of roughly the value of one euro have as we all know worked perfectly in the United States. None of you Americans have seen any cost of living increases lately,right? I’m just waiting for the MEP:s to come up with more equally brilliant ideas for fighting inflation, like “Whip Inflation Now”-buttons.
And the MEP:s are of course not the least deterred by the fact that the most significant price inflation have occurred in real estates, which are usually not exchanged through one or two euro coins.
Just in case this doesn’t work, how about restricting money supply growth which have steadily accelarated for the last few months from a already high (much higher than the 4.5% value the ECB is supposed to aim at)level to a full 8.5% in September 2005. I suspect that many of the 376 MEP:s that signed this belong to the vocal group of pundits which have called for the ECB to become even more inflationary.