The Real Goal of Fed Policy: Breaking Inflation, the Middle Class or the Bubble Economy?
“There is no sense that inflation is coming down,” said Federal Reserve Chairman Jerome Powell at a November 2 press conference, — this despite eight months of aggressive interest rate hikes and “quantitative tightening.” On November 30, the stock market rallied when he said smaller interest rate increases are likely ahead and could start in December. But rates will still be increased, not cut. “By any standard, inflation remains much too high,” Powell said. “We will stay the course until the job is done.”
The Fed is doubling down on what appears to be a failed policy, driving the economy to the brink of recession without bringing prices down appreciably. Inflation results from “too much money chasing too few goods,” and the Fed has control over only the money – the “demand” side of the equation. Energy and food are the key inflation drivers, and they are on the supply side. As noted by Bloomberg columnist Ramesh Ponnuru in the Washington Post in March:
Fixing supply chains is of course beyond any central bank’s power. What the Fed can do is reduce spending levels, which would in turn exert downward pressure on prices. But this would be a mistaken response to shortages. It would answer a scarcity of goods by bringing about a scarcity of money. The effect would be to compound the hit to living standards that supply shocks already caused.
So why is the Fed forging ahead? Some pundits think Chairman Powell has something else up his sleeve.
Continue readingFiled under: Ellen Brown Articles/Commentary | Tagged: Bank of North Dakota, banks, Danielle DiMartino Booth, economy, Fed chair, Fed put, Federal Reserve, Inflation, Jerome Powell, NATIONAL INFRASTRUCTURE BANK, public banking, quantitative easing, Reconstruction Finance Corporation, supply chains, THE FED, Tom Luongo | 51 Comments »
WEB OF DEBT BLOG 
Solving the Debt Crisis the American Way
Our forefathers turned their debts into currency. That Constitutional approach could work today.
On Friday, Jan. 13, Treasury Secretary Janet Yellen wrote to Congress that the U.S. government will hit its borrowing limit on Jan. 19, forcing the new Congress into negotiations over the debt limit much sooner than expected. She said she will use accounting maneuvers she called “extraordinary measures” to keep U.S. finances running for a few months, pushing the potential date for default to sometime in the summer. But she urged Congress to get to work on raising the debt ceiling.
Lifting it above its current $31.385 trillion limit won’t be easy with a highly divided and gridlocked Congress. As former Republican politician David Stockman crowed in a Jan. 11 article:
Continue reading →Filed under: Ellen Brown Articles/Commentary | Tagged: AMERICAN DEBT, banks, debt ceiling, economy, HOUSE OF REPRESENTATIVES, Inflation, interest rates, quantitative easing, STIMULUS, Trillion dollar coin | 38 Comments »