Garipolo and spider researchers
From Jefferson Miola’s blog
Gabriel Garipolo responded to critics of stratospheric interest rates by saying, “Anyone can fight central banks, but central banks can’t fight with data.”
What Garipolo meant by the data that B.C. “can’t fight” was that inflation reached 4.68% in the past 12 months in October, just 0.18% above the target cap, a performance that could never justify the absurd 15% SELIC rate.
Under the ludicrous pretext of exceeding the target by 0.18%, President Garipolo stipulates the maintenance of a “significantly reduced monetary policy for a very long time” (Kopom statement of November 5, 2025).
The BC Governor knows that the real problem is not inflation (in fact, inflation has been contained to one of its lowest levels in history), but rather the unrealistic target of 3% inflation set by the current government, the National Monetary Council (CMN), for 2025 and 2026.
In an “Open Letter to the National Monetary Council” (dated October 15, 2024), Luiz Gonzaga Beluzo and economists from several Brazilian universities said, “The 3% target has proven to be dysfunctional.”
The authors recalled that “market consensus indicates that inflation will be 4% in 2025, 3.6% in 2026, and 3.5% in 2027.” That means it will always be above the unrealistic 3% set in the June 2023 CMN resolution.
Mr. Belluzzo and his prominent colleagues proposed to CMN that “the inflation target be increased from 3% to 4% in order to enable a more balanced growth of the Brazilian economy, but without abandoning the objective of price stability.”
There is no empirical or statistical evidence to justify a 3% inflation target in Brazil. Since the targeting system was introduced in 1999, the average annual inflation rate has been 6.3%.
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When Brazil’s average inflation rate over the past 26 years has been 6.3%, there is no good argument for setting a target of 3%, which is less than half the average annual inflation rate for more than a quarter of a century.
From 1999 to 2004, the inflation target was realistically set at an average of 5.92%. The target was then permanently fixed at 4.5% for 14 years from 2005 to 2018.
BC’s move to an (unrealistic) annual inflation target of 3% began after (or at the same time as) the coup against President Dilma, in order to normalize interest payments and attacks on the spoils of public debt.
During the administrations of Enrique Meirelles at the Treasury Department and Ilan Goldfein at BC, the CMN set guidelines to “gradually lower the inflation target to bring it closer to the level adopted by other (countries) with targeting systems” (CMN, June 2017), but this is not the reality in Brazil, which is de facto a price index economy.
Despite the reality mentioned in the previous paragraph, which recommended keeping the inflation target at a historical level of at least 4.5%, the current government has maintained the logic of gradual cuts established in 2017 during the usurper Michel Temer’s regime and continued to deepen with Bolsonaro, Paulo Guedes, Roberto Campos Neto and others.
Given the historical context, Garipolo’s reference to “unfightable” data resembles the anecdotal nature of spider researchers who came to completely absurd conclusions from experiments in ripping off arachnids’ legs.
The scientist placed the spider on the table, removed one leg, released it, and commanded, “Come on, spider.” And the spider walked.
He then repeated the same procedure, removing the second, third, and even the seventh leg, and with each new command, the spider started walking again, but gradually slower and with more drag.
The researchers wrote down one after another in a research spreadsheet: “Seven-legged spiders walk. Six-legged spiders walk. … Two-legged spiders walk. One-legged spiders walk.”
Finally, the researchers ripped off the spider’s eighth and final leg and commanded it, “Go, spider!”, but the spider remained completely motionless.
The researcher then argued several times before finally getting irritated and yelling, “Come on, spider!” The spider didn’t move, and although he screeched for the spider to move, the creature remained motionless, so the scientist jotted down the unusual conclusion in a spreadsheet: “Spiders without legs are deaf.”
If Mr. Garipolo does not act like a spider researcher and considers the real cause of the problem, which is not inflation but rather inflation targeting, the suspicions and criticisms that he is a slave to landlordism will be dispelled.
In addition to being more honest, this would be a beneficial action for the majority of poor people. They will not see funds from the Union budget diverted to the private pockets of renters.
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