Money and Banks

The Fed admits inflation is a problem, so now begins the search to find a fix that doesn't involve a recession or anything else that might allow the economy to heal its malinvestments.

Thanks to covid shutdowns, declining productivity finally brought price inflation to the fore. But the world's governments have learned nothing and cling to the same inflationist policies.

Overall, at least 50 percent of the consumer price index in Japan appears to be government controlled, which is reflected in the significant growth of government spending on subsidies.

From its inception, the Fed's job has been to pay off the debt and cover excess expenditures with newly printed paper money.

The Fed may slow or eliminate new bond purchases but is not planning to sell. Meanwhile, producer prices have skyrocketed and Americans are consuming more but producing less. Get ready for entrenched price inflation.

Crack-up booms have historically facilitated the growth of authoritarian political movements. This is not inevitable. But we do need radical change to today's fiscal and monetary disasters.

Deflation empowers the citizen by allowing her modest savings to purchase more goods over time. Inflation empowers the state by reducing the size of its enormous debts in real terms—and through the inflation tax.

The current system of freely fluctuating paper currencies with the US dollar as reserve currency would not have been possible without political centralization of monetary systems. 

Thanks to covid shutdowns, declining productivity finally brought price inflation to the fore. But the world's governments have learned nothing and cling to the same inflationist policies. 

The central bank can manipulate the interest rate to whatever level it desires. But it cannot control how the interest rate is dictated by each individual's time preference. That's a problem.