Janet Yellen admits she underestimated inflation, but she still does not realize that inflation is not higher prices, but the increase in fiat money that forces up prices.
The Federal Reserve is raising interest rates in hopes of reversing some of the inflationary damage it has done for more than a decade. Unfortunately, the Fed already has done incalculable damage to the economy.
Popular economic wisdom says central banks can counter harmful effects of inflation by raising interest rates. Unfortunately, such moves carry their own forms of misallocation of resources and capital.
Fed chairman Jerome Powell recently claimed they were "targeting" the "neutral" interest rate. The Fed cannot set or even know that rate, for it doesn't come from government authorities.
