Until very recently, the hefty monetary and fiscal relaxation unleashed by governments to stimulate the economic recovery at the onset of the global financial crisis has not had major inflationary repercussions, in particular as the main benchmark has been the benign consumer price inflation, rather than the rapidly growing real-estate and stock-exchange prices. At the same time, the so-called modern monetary theory has grown very popular with both academics and market analysts.

Here we go again it may seem to many. The Fed is preparing us for a policy tightening just when a powerful growth cycle upturn is faltering. Or is it in fact an example of another well-known type of error from Fed history—getting behind the curve of rising inflation? The most plausible answer is that it is neither.

Instead, the huge monetary inflation shock which the Fed has administered so far in this pandemic means that the “normalization steps” now in prospect for 2022 are all but irrelevant to macroeconomic prospects or asset market price trajectories.

All great narratives must come to an end. No one can predict whether the transitory inflation narrative will ever return. But for now, the Federal Reserve and Treasury have officially retired its banner slogan.

Yesterday the New York Times reported Treasury secretary Janet Yellen saying:

I am ready to retire the word transitory … I can agree that that hasn’t been an apt description of what we are dealing with.

In discussions surrounding of the world’s monetary systems today there is usually one thing almost everyone can agree on: that money should be controlled by the organizations we call “states” or “sovereign states.” Nowadays when we say “the US dollar” we mean the currency issued by the US government. When we say “the British pound” we mean the money issued by the regime of the United Kingdom.

America’s growing rural divide is not going away any time soon. Recent gubernatorial elections in Virginia have rekindled talk about an inevitable Republican resurgence during the 2022 midterms. History has repeatedly shown the party outside of the White House making gains during the midterms elections, one of the most predictable trends of election cycles in American history.

Dr. Gary Schlarbaum, one of our generous supporters, has again offered to match donations received through December 11. That means your $10 donation becomes $20, your $25 donation becomes $50, and so on.

With a donation of $25 or more, you’ll receive a copy of Hans-Hermann Hoppe’s What Must Be Done. And, thanks to Gary, your donation doubles. Please donate today.

Mises.org reader Brad Cole writes:

A great-great-grandfather Montgomery Cole, got imprisoned during the Civil War because of speaking out against the draft policies. His arrest, along with others, resulted from President Lincoln’s invoking his Proclamation 94 in September of 1862.