Independent central bankers are not known for taking undue risks. But what happens when they misjudge sharply rising inflation rates and fail to live up to their mandate? Then problems threaten to become uncontrollable, and confidence in the monetary authorities and the currency will suffer. The core mandate of the European Central Bank is to ensure a stable price level. However, the governing council has grievously neglected increasing signs of a prolonged and unacceptably higher inflation that could become self-reinforcing. In recent months the ECB has reached an impasse. It is now time to reverse gear. On the one ... (full story)