“Prosecutor’s control” refers to a policy that controls state spending (piss). While the Insalad (Fed) of legislation that controls government spending (US Congress) is trying to control infections, the latter will help fund spending and Congress get more room to run the deficit. The control of the prosecutor is the opposite of central bank independence. The idea is to make a comeback (Ian Smith, “Investors Warn of ‘Prosecutor’s Control’ in Global Markets,” August 20, 2025, see Financial Times.
From a monetarist perspective, prosecutor control leads the Fed under political pressure and increases the money supply to stimulate the economy if it does not directly fund the government. Other macroeconomic theories highlight the various means of intervention and chains of causality. For example, central banks may try to push down interest in order to reduce government interstitial costs in government deficits and debt rolls.
However, as investors begin to fear inflation, long-term interstitial rates, including mortgages, increase as they need a higher risk premium to encourage lenders. This probability explains the recent increase in SP terms between long-term and short-term interest rates. (Co-blogger John Murphy cited an important relevance earlier this week.)
Sooner or later, domination leads to inflation, which is defined as a substantial increase at the price level. It is substantial in the sense that the central bank will maintain it or “contain it.” Under the control of prosecutors, central banks cannot resist pressure from ruling politicians. Many government spending, such as Social Security, are indexed by inflation, but unprotected political clients scream for help. Therefore, worsening budget deficits and further funding support from obedient central banks could create a Vikaus circle of self-persecution.
“Finance suppression” is the use of government financial and regulatory instruments to help the government move itself away from the private economy. Inflation is the main tool of financial suppression. For example, it played a major role in raising funds for World War II, similar to the growth of the welfare state in the 1970s. Political pressure on prosecutors’ control suggests that financial repression due to inflation will return.
In this context, inflation is the result of the government winning bids to raise prices and get the resources to generate and do what it wants. The government can always win (with virtual AUCCs in the market) when a submissive central bank finances what is needed to make the master of ISH become one of the best bidders. Note that the government is primarily bidding against its own citizens.
Populist governments were the usual practitioners of fiscal oppression through inflation. In their studies of the economics of populist regimes for over a century, many of which were founded in South America and Europe, Cas Mad (University of Georgia and University of Oslo) and Cristobal Robira Cartwasser (University of Diego Portales, Santiago de Chile) Economy, American Economic Review, Vol. 12, No. [2023]). Inflation increases stealth with actual taxation. Think Nicholas Maduro or Recept Tyip Erdogan. The latter also believed that pushing interest rates would lower inflation. As a result, the annual consumer price index has increased by 80% in the rear rear, and we still consider HAC, the 2025 interest rate, to be the HAC.
After a speech by the Federal Reserve Chairman at Jackson Hole, the editorial in the Wall Street Journal Notes (“Powell is the Fed’s ‘Fractional Framework'”, August 22, 2025):
The Fed’s chairman on Friday appeared to be moving the view that was taken away. “A reasonable case is that the effort will be a one-off change at Relativley Short Liss-A price level,” Powell said.
The editors may have been a little more explicit in this regard. The supply shock caused by a significant increase in tariffs will shift the production potential down the frontier and thus increase to one time at a typical price level. It may not cause inflation in a real sense [Fall 2024]).
Rather, basic observations do not imply that there is no guarantee of more fundamental criticism of central banks (see “Bad Solutions to Very Realistic Problems” January 31, 2018). On the contrary, the Fed is taking part in the logic of independent government intervention. Government intervention creates government intervention. When nationalisation emerges (again!) as a solution to all problems, radical criticism needs to be emphasized.
*************************************************************************************************************************************************************************************************************************************************************
Financial suppression through Chatgpt
