0 Members and 1 Guest are viewing this topic.
“If we still measured inflation the way we did 40 years ago, it would be 15%, not 7.5%. And the rate hikes they’ve proposed are completely inadequate. In fact, the Fed is intending to pursue an accommodative monetary policy. Even if they raise interest rates to 1 or 2%, that is highly accommodative. That’s the same type of interest rates they had when inflation was below 2%. You’ve got inflation at 7.5%, even the way they measure it – and rising. The only way to put out this fire is to have positive real interest rates. The Fed needs to get above the inflation rate. We’re not even going to get close. So, they’re going to continue to pour gasoline on the fire. And so, the entire time the Fed is inching up rates, inflation is actually going to be moving higher. Inflation is going to be worse in 2022 than it was in 2021, and real interest rates are going to continue to fall even as the Fed raises nominal rates.”
If we still measured inflation the way we did 40 years ago, it would be 15%, not 7.5%.
This is the most revealing statement, to me:We are staring straight into the face of incipient stagflation, and we've so monkeyed with the yardsticks used to measure it that we can't even recognize it.
I guarantee you WILL recognize it! In spades!
