You are very right in your main observation, analysis and conclusion.
And without context,your critique is outstanding. When I engage with someone like you, I temporarily cast aside any concern that the person I am engaging with does not know what they are talking about (unfortunately,I cannot say the same about
eliakeem, he will have to behave or endure abuse, he is all over the map like a lost Magellan ), because, on the surface,you seem to know what you are talking about. Your retort is a natural one in this conversation for any thinking, informed person who knows how to connect dots.
I actually anticipated the points you raised.
My concern is not so much with the lowering of the interest rate, but with the scale, frequency, extent of direction, and the entire context of politics that surrounds this.
I try to be a reading man -as much as possible, I believe that to talk much one has to read much, else one does not earn the right-. Last year I read
"The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse" by
Mohamed A. El-Erian.He talks much about the dangers of overreliance on central banks to address crises. The book is dry as can be for anyone not interested in central banks, the economy and financial crises, but for me it was a good read, since I find these things as interesting as a living ecology.
It is almost like central banks are used as the magic pill. Politicians can mess up the economy all they want, if there is a crisis, there is always the central bank,it can always turn the dials to get the economy back on track. This is worrying, especially when you see a move from 16% to 12% in 5 months is not effective, then another move from 12% to 9% is barely registering any difference.
As pointed out above in another post of mine, we could be trying to turn the wrong dials. We could be trying to jolt money supply by fiddling with interest rates, while the real problem is business confidence and the political administration.
This is why a healthy dose of humility on the part of Magufuli could go a long way.
Currently, we do not have an iota of that dose.
I am afraid by the time the realization that we are in a ditch hits, it could be too late.