"Firstly, how can you believe interest rates have no effect on inflation if you also believe they make imports cheaper?"
I said little (if any) not NO effect & secondly I said that higher interest rates attract more 'hot' money which strengthens our $ (higher demand for it) which in turn makes imported good cheaper. That actually masks the true underlying inflation by way of how governments measure inflation (CPI) by selectively picking what constitutes the "basket" ie a drop in price of included electronics (LCD, computer etc) more than offsets rising fruit costs for example. So we get a situation where CPI figures show mild inflation whereas price of essentials are rocketing.
"Secondly, what's your magic solution to replace inflation targeting that keeps interest rates low while also keeping inflation low?"
No MAGIC required. Govs just have to fess up to what inflation really is. It's not CPI figures, it's not even rising food prices ... they are only the symptoms of inflation. Inflation is the creation of money/credit in excess of productivity. But Govs worldwide are addicted to spending more than what comes in & are already taxing the system heavily so increasing taxes would only see them lose power. So they take the easy way out & run deficits year after year after year. So my "MAGIC" idea is for Govs to rein in their irresponsible & senseless spending on things like war & bloated public services & put workable solutions forward aimed at getting our once self sufficient country back that way (can you believe we import food from CHINA !!! at the expense of killing our own agri sector ... not to mention the quality (health) aspect .... ahhhhhh) & they also have to commit to pegging money/credit creation to GDP
