LONDON: "I don't get it. Inflation is lower than it should be. As to why it is slowing, where it will stop or whether it's a bad thing, I just don't know."
Mario Draghi did not say this at his November press conference, and the president of the European Central Bank would probably never articulate such thoughts perhaps not even to himself.
You don't stay at the top of a profession like central banking by admitting that you're lost without a compass. But in practice, the comment probably encapsulates the current position of many economists and central bankers.
The emergency of disinflation, economists' name for a slowdown in the rate of inflation, is a puzzle.
Economic growth is picking up, unemployment rates are flat or falling, monetary policy could hardly be more stimulative and fiscal deficits are still high.
According to any conventional theory of price trends, that combination should be accompanied by stable or increasing inflation rates, leading policymakers to worry about impending pressure for price and wage increases.
In fact, the rate of consumer price inflation is declining in most countries. The latest euro zone reading was 0.7 percent, down from 2.5 percent a year ago, when the economy was substantially weaker.
The unexpected decline in price pressure motivated the ECB to cut its key policy interest rate last week, a month earlier than most investors expected.
In the United States, the inflation rate has fallen from 2 percent to 1.2 percent in a year, and the lack of inflationary pressure helped persuade the US Federal Reserve not to slow the pace of quantitative easing in September.
Economists have come up with theories to explain the situation: the pressure on wages from globalisation, the weight of unused productive capacity, the still-clogged financial system, slowing growth in China pushing commodity prices down.
Some or all of those theories are presumably right, but the persistent forecasting failures show that professionals are baffled by the interplay of disinflationary and inflationary forces.
What happens next? Some economists expect a reversion to higher inflation rates as economies strengthen.
Then again, the pressure to make individual companies and whole economies more competitive could lead to further disinflation, or even to deflation (absolute declines in consumer prices).
Draghi and other central bankers are doing their best to keep deflation away. But they cannot force prices higher, no matter how many words they utter and how much free and cheap money they provide.
Perhaps the authorities should relax. Low inflation may not do any economic harm. Even a little bit of deflation may not be harmful.
That was the conventional wisdom among policymakers as recently as the 1990s, when the goal was a mix of small annual increases and decreases in prices. Japan has had exactly that sort of stability.
The nationwide consumer price index has been becalmed between 99 and 104 since mid-1992. Scaremongers who warn that the West is heading for a "Japan-like scenario" should reflect on whether things have worked out so badly.
Japan's zero inflation has not turned into sharp deflation, and per capita income has increased at about the same rate as in other developed countries.
The worry with disinflation in Japan and most other developed economies is that, without increases in nominal wages and prices, there won't be enough cash generated to service the existing heavy debt load.
That's plausible: Japan may just have been able to delay a crippling debt crisis for a few decades.
So future governments would have to find a way of writing down the debts that disinflation has rendered uneconomic.
The obvious solution would be to monetise the debt buying it back with printed money.
If it's unclear whether disinflation really is a worry, at least the immediate lesson for investors is more certain.
The conventional signs of economic strength for example, the strong US employment report for September mean less than they used to.
For as long as disinflation lasts, monetary policy will be more responsive to news of price stagnation than to almost any cheerful economic development.
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