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Summers: ‘Underlying Inflation’ Is 4.5 to 5% and Forecasts Overstate Ability of Monetary Policy to S

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mystery-ak:
Summers: ‘Underlying Inflation’ Is 4.5 to 5% and Forecasts Overstate Ability of Monetary Policy to Slow Economy

Ian Hanchett 3 Jun 2023

During an interview with Bloomberg on Friday, Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton, Larry Summers stated that the jobs report shows that forecasters “are exaggerating the impact and efficacy of monetary policy in slowing the economy down.” And that while transitory inflation factors have fluctuated and caused transitory parts of inflation to go up and then come back down, “the underlying inflation now” is 4.5-5%.

Summers said, [relevant remarks begin around 2:06:00] “I think you have to read this report as strong. I think the forecasting community’s got to do a little soul-searching. They’ve been low on this report for 14 months in a row. That has got to suggest that there’s something about the underlying strength of the economy that they’re missing, or another way to put it is that they are exaggerating the impact and efficacy of monetary policy in slowing the economy down.”

He also stated that “there’s been a bunch of fluctuation in the transitory factors, with the transitory inflation going up and then the transitory inflation going back down. But the underlying inflation now [is] running in the 4.5%-5% range…if you want to get inflation down from that 4.5-5% range, you’re going to have to do things that will have, as a side effect, a much looser labor market.”

more
https://www.breitbart.com/clips/2023/06/03/summers-underlying-inflation-is-4-5-to-5-and-forecasts-overstate-ability-of-monetary-policy-to-slow-economy/

Hoodat:

--- Quote from: mystery-ak on June 03, 2023, 04:16:03 pm ---Summers: ‘Underlying Inflation’ Is 4.5 to 5% and Forecasts Overstate Ability of Monetary Policy to Slow Economy

--- End quote ---

See?  This is why idiots like Larry Summers don't get it.  Controlling inflation is NOT synonymous with slowing the economy.  Countries like Venezuela, Argentina, Chile, Zimbabwe, and the Weimar Republic weren't having runaway inflation because their economies were booming.  They were having runaway inflation because the government insisted on stealing the wealth of others by printing up more money.

If the Fed wants to stop inflation, then they should stop underwriting government deficit spending by expanding the money supply.  Just do that one thing, and inflation ends today.

As for the economy, that will be up to the government.  If government insists on continuing its reckless deficit spending path, then they will have to compete on the open market for excess cash by offering higher interest rates.  The more money government needs to borrow, the higher interest rates will go.  And THAT will slow the economy by diverting the investment dollars needed to grow it into government coffers that create no wealth or growth.

The market should be setting interest rates here, not the abundance of monopoly money generated by the FED and the arbitrary rates they set to those they hand it out to.

DB:

--- Quote from: Hoodat on June 03, 2023, 04:48:21 pm ---See?  This is why idiots like Larry Summers don't get it.  Controlling inflation is NOT synonymous with slowing the economy.  Countries like Venezuela, Argentina, Chile, Zimbabwe, and the Weimar Republic weren't having runaway inflation because their economies were booming.  They were having runaway inflation because the government insisted on stealing the wealth of others by printing up more money.

If the Fed wants to stop inflation, then they should stop underwriting government deficit spending by expanding the money supply.  Just do that one thing, and inflation ends today.

As for the economy, that will be up to the government.  If government insists on continuing its reckless deficit spending path, then they will have to compete on the open market for excess cash by offering higher interest rates.  The more money government needs to borrow, the higher interest rates will go.  And THAT will slow the economy by diverting the investment dollars needed to grow it into government coffers that create no wealth or growth.

The market should be setting interest rates here, not the abundance of monopoly money generated by the FED and the arbitrary rates they set to those they hand it out to.

--- End quote ---

The government has turned to printing money out of thin air without someone buying the debt. They broke the feedback controls on deficit spending. Inflation follows in a death spiral.

Kamaji:

--- Quote from: Hoodat on June 03, 2023, 04:48:21 pm ---See?  This is why idiots like Larry Summers don't get it.  Controlling inflation is NOT synonymous with slowing the economy.  Countries like Venezuela, Argentina, Chile, Zimbabwe, and the Weimar Republic weren't having runaway inflation because their economies were booming.  They were having runaway inflation because the government insisted on stealing the wealth of others by printing up more money.

If the Fed wants to stop inflation, then they should stop underwriting government deficit spending by expanding the money supply.  Just do that one thing, and inflation ends today.

As for the economy, that will be up to the government.  If government insists on continuing its reckless deficit spending path, then they will have to compete on the open market for excess cash by offering higher interest rates.  The more money government needs to borrow, the higher interest rates will go.  And THAT will slow the economy by diverting the investment dollars needed to grow it into government coffers that create no wealth or growth.

The market should be setting interest rates here, not the abundance of monopoly money generated by the FED and the arbitrary rates they set to those they hand it out to.

--- End quote ---

:thumbsup:

bigheadfred:
Here is a video that helps explain how the monetary system works.

2:02:48
ZEITGEIST: ADDENDUM | Full Free Documentary | Peter Joseph Social Distortion


https://www.youtube.com/watch?v=oMnXu-IXeM0

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