Inflation

While we speak of a desire for honest money, the larger problem is that the Federal Reserve System cannot coexist with an honest money regime.

Government inflation makes people’s responses much more delayed, leaving people’s value adding greatly degraded.

Progressives like Robert Reich now claim that there is no inflation, just businesses arbitrarily raising prices so they can increase profits. Such claims do not pass the test of economic logic.

After following hyper-Keynesian policies for more than two decades, the Fed is about to create the conditions that Keynesians claimed were impossible: an inflationary recession.

Even with near-record inflation, the US dollar still has gained strength relative to other currencies. This does not mean that the Fed has been acting responsibly.

There are only painful options for bringing price inflation under control at this point, and that's all thanks to the Fed's creation of countless bubbles and malinvestments over the past decade. 

In a free market, short-term and long-term rates would move toward convergence. Fed interference with interest rates ensures that won't happen.

Hyperinflation? Yes, it can happen here, and the more officials deny hyperinflation is possible, the more they create the conditions that causes it.

The world seems to be on fire, and much of the trouble comes from the efforts of central banks to suppress interest rates. No one understands that problem better than British historian Edward Chancellor.

This is the "American dream" the Fed has given us: work more jobs and longer hours to keep paying those bills that are now growing at 8 percent per year.