Recent research shows that current inflation, adjusted for changes in methodology, is much closer to the peak of the early 1980s, casting doubt on the sufficiency of the Fed's countermeasures
i often am not sure if the outcome will be a deflationary or hyperinflationary crisis. perhaps many years of unchecked inflation followed by a hammer Volker-type blow. That would also break the numerator though - real gdp growth so debt may still be elevated. I do not know if a crisis is inflationary or deflationary . Traditionally, war has been inflationary. Philip Fisher always wrote never sell on a war scare as war is inflationary. However does that apply to a nuclear war? or an asteroid hitting the planet?
Which is more important, FOMC rates or Fed assets? If price inflation is resulting from the flood of money from QE, then isn't the better solution selling off the assets now? And why is the Fed still paying interest in reserves?
I think they need to do both -- raising rates and QT. But as I listen to Powell's press conference as I type this, I get the sense that the Fed is in deep denial. For example, he is saying that a 3.5% fed funds rate at yearend would be restrictive. Which seems completely crazy.
CASH hasn’t been trash as Ray Dalio likes publicly push. With sit’n becoming crystal clear FED QT process is draining cash away from system when folks are looking for cash to survive basics of life, it destroys not only trust in judgement of so called experts ( that generate untold 100s of millions of fees for being tight or wrong), it systematically destroys trust in institutions to relieve citizens of their distraught. Well done piece. Disheartening nonetheless. Lots more pain in the way for the common folks.
i often am not sure if the outcome will be a deflationary or hyperinflationary crisis. perhaps many years of unchecked inflation followed by a hammer Volker-type blow. That would also break the numerator though - real gdp growth so debt may still be elevated. I do not know if a crisis is inflationary or deflationary . Traditionally, war has been inflationary. Philip Fisher always wrote never sell on a war scare as war is inflationary. However does that apply to a nuclear war? or an asteroid hitting the planet?
Which is more important, FOMC rates or Fed assets? If price inflation is resulting from the flood of money from QE, then isn't the better solution selling off the assets now? And why is the Fed still paying interest in reserves?
I think they need to do both -- raising rates and QT. But as I listen to Powell's press conference as I type this, I get the sense that the Fed is in deep denial. For example, he is saying that a 3.5% fed funds rate at yearend would be restrictive. Which seems completely crazy.
CASH hasn’t been trash as Ray Dalio likes publicly push. With sit’n becoming crystal clear FED QT process is draining cash away from system when folks are looking for cash to survive basics of life, it destroys not only trust in judgement of so called experts ( that generate untold 100s of millions of fees for being tight or wrong), it systematically destroys trust in institutions to relieve citizens of their distraught. Well done piece. Disheartening nonetheless. Lots more pain in the way for the common folks.
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