The Inflation to Come

The Inflation to Come

With out-of-hand government spending and extraordinary budgetary deficits. It is only a matter of time before we see frightful inflation. It may take a year or two and it may happen by the time the next presidential term comes around, but as night follows day, it will come.

The Federal Reserve’s job is not to protect against systemic financial risk, as is being proposed by the Administration. It’s primarily to maintain the value of the currency. Incidentally, it can do a better job of that.

Also, since 1978. The Fed has to help enforce the Full Employment and Balanced Growth Act, otherwise known as Humphrey-Hawkins. That conflicts with the Fed’s Number One stated activity. That’s because the Act enforcement creates an inflating bias, and not one of dollar stability. So there is always a conflict of interest being overlooked by financial media comment.