Real deflation—both monetary inflation and price inflation—is necessary, and that can only be accomplished if the Fed can resist the temptation to keep doing what it's been doing since 2008.
The Fed is losing a lot of money. The Fed's stated plan is to monetize these losses and still report a positive capital and surplus position through the use of “creative accounting.”
Unlike a private-sector service, police do not operate under any contractual obligations to provide services in any particular way. They can choose to do nothing at all, and face no real consequences.
Vladimir Putin (not unlike President George W. Bush) has led his country into a destructive war, yet the Russian political leadership enjoys wide public support.
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.
