Why the Fed and Inflation Go Hand in Hand By Antony P. Mueller

[Manuel Tavares]

Why the Fed and Inflation Go Hand in Hand
By Antony P. Mueller
https://rayviolet.blogspot.com/2022/06/why-fed-and-inflation-go-hand-in-hand.html

The recent outbreak of price inflation with the jump to an annual rate of 8.6 percent in May 2022 came as a surprise to the US central bank (the Federal Reserve).

Having ignored the warnings of the Austrian school economists, the policy makers were paralyzed in the face of a phenomenon they deemed impossible to happen. None of their forecasting models had triggered an inflation alert.

Central Banks Don’t Fight Inflation
Failing to apply countermeasures in time, the Fed is now faced with the hard job of bringing down the price inflation rate without causing a recession. Prolonged stagflation may characterize the next decade. Are we back in the 1970s? During the stagflation at that time, Arthur Burns was the chairman of the Federal Reserve. After having left his job in 1978, he held an alarming speech at the meeting of the International Monetary Fund in Belgrade, on September 30, 1979. His presentation bore the title “The Anguish of Central Banking.” In his talk, the former chairman of the American Federal Reserve explained why central banking and price inflation go hand in hand.

In his presentation, Burns offered little hope for an escape from secular inflation. Current worldwide philosophical and political trends, Burns diagnosed, would continue to undermine wealth creation...+
https://rayviolet.blogspot.com/2022/06/why-fed-and-inflation-go-hand-in-hand.html