Raising fiat rates to fight inflation is a slow and primitive tool. While money scarcity does help reduce demand, it is less effective than technology. People need food, water, housing, energy, security and transport. If the don'y have money they will lend to get the things they need. Money manipulations never stopped inflation but only technology that made more food, clean water, energy and better housing development, more effective transportation, better health solution and the list goes on and on and on. So why are governments raising interest on fiat?

1. Because they can
2. Because Banks make money this way
3. Because this is the primitive way of shutting down scams and let real progress flourish.

In a progressed world, lets say Bitcoin is the money and its scarce so investors will invest and choose best companies.

In our primitive world of fiat, the minting is by allowing debt, therefor some can invest based on money they don't have, and when the investment is bad they just default and the money is burned.

Raising Interest Is Supporting Inflation In First Phase

What people lack to understand is that the interest rate is not fighting inflation but supporting inflation in first phase as its affect is actualy minting fiat. Only the defaults are burning money. So this primitive tool is aim to create defaults in the market.

When interest is raised by 1% a big part of the debt returns are also rising by 1% (even if just on paper). This evaluation creates more money in the ledgers of the banks - more money more inflation.

In the second phase lenders start to default because they can't return the money. Only then banks earase money and only then the inflation starts to cool down. The Saving behaviour is not affecting the inflation at all because every USD in a saving account is just levereged by the Bank for another lending. The banks can lend 10 USD for Every 1 USD in a saving account therefor saving is also enabling more minting of fiat (remember debt is the fiat mint).

So the primitive fiat cycle of interest raise will not stop inflation very soon but will collapse many weak companies. Only when these companies won't have money to pay the debt the burning will begin and inflation will cool.

Why is it primitive? Because the burning never done by personal money of the defaulting people, they ate the money. The burning is from other investors pockets, usualy tax money and pensions money invested by large institutions.

My advice?

First I wish to open here the discussion to establish these assumptions.

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