The Two percent inflation target - monetary policy's sacred commandment for three decades - has become structurally impossible to achieve. Not because central bankers lack skill, but because every attempt to hit the target destroys the financial architecture that previous monetary expansion built. This is the endgame of central planning: a system that cannot tolerate its own success criteria without collapsing.

The Arbitrary Anchor

New Zealand invented the two percent target in 1989 by looking backward at what inflation had been when things felt stable—hardly rigorous science. Other central banks copied this guess, transforming it into dogma. But the economy of 2025 bears no resemblance to 1989. We've financialized every asset class, built supply chains optimized for fragility, and erected a debt tower requiring perpetual refinancing at suppressed rates just to avoid collapse. The two percent target was designed for a world we've already destroyed.

The Cantillon Trap: Winners and Losers by Design

Monetary expansion doesn't spread evenly. New money concentrates where it enters—in financial assets, real estate, and the balance sheets of those with credit access. This creates two economies: one for asset-holders, enriched by expansion; another for wage-earners, crushed by the cost increases that follow.