Here’s a chart via Swedish blog The Trader that will warm the cockles of any inflation hawk.
It captures “real interest rates” as measured by the interbank rate less CPI.
The Trader also sites Gresham’s Law, which according to Wikipedia is “When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation,” or “Bad money drives out good.”
The Trader’s chart shows how the same principle applies today:
Photo: The Trader