News: The September Consumer Price Index, (CPI), has been released roseFederal Reserve Chair Jerome Powell, White House economics and the president should all be able to see that this is not a temporary increase in inflation. Better yet, it’s proof that we should avoid adding fuel to the fire, even if it means cutting back on President Joe Biden’s multi-trillion-dollar American Rescue Plan.
Until recently, evidence of inflation exceeding 2 percent—the Fed’s traditional goal for inflation—has been dismissed as temporary or transitory, and for good reason. There has been a lot of new printed stimulus money passing through the system. This, accompanied by serious supply-chain disruptions, might be over in another 12 months—if we’re lucky.
In August of that year, the Biden administration was inaugurated Clearly indicated that 2021’s economy would show as much as 4.8 percent inflation—but, with an optimistic spin, would fall to 2.5 percent the next year. The issue is complicated by the fact that there are still funds available for stimulus in yet to be determined legislation.
It is not easy to face the truth and wait before you counter inflationary forces. This could lead to harsher actions later on, when the Fed, for instance, hits the money brakes more hard to cool down the economy. We might witness interest rates rise to the ceiling in such cases, as construction activity and high tech investment drop, and then the economy could slide into recession.
Politicians have used wordplay in the past to hide the truth. The CPI in 1978 was More than 7.5%Fed policy to lower the economy caused slow economic growth. Fred Kahn was the economist who headed President Jimmy Carter’s inflation tax group. He was asked whether he believes we are heading toward depression. Kahn was warned by senior officials not to use “depression” as a word. It was thought that referring to “depression” as a self-fulfilling prophecy would be a good idea. So they invented a new euphemism. Kahn RespondedAccording to congressional testimony, “We could have the worst banana for 45 years.”
Later, during Reagan’s Reagan years the truly bad banana or the r-word was created. Fed chair Paul Volcker pressed the accelerator hard to eliminate inflation. Hit the unemployment rate 10.8 PercentEnde 1982. Kahn’s forecast of bad bananas turned out to be accurate.
Washington’s leaders are not likely to be able to tell a spade from a spade, as they have been for years. Today, however, it’s not depression or recession. This refers to inflation without qualification. Nobody in authority would admit that our dollars are losing their buying power. Washington is quietly taking advantage of us. dollar-printing pressPoliticians are the ones who make decisions. Drivers are essential for the operation of presses.
Although it seems like the Fed chair can accept CPI heading north as a valid indicator, he must also qualify the trip with the term “temporary”. And while Washington analysts argue that COVID-19 disruptions are affecting just some key items, such as used cars and lumber—and that ports clogged with container ships waiting for workers, drivers, and trucks to be unloaded are the culprit—an analysis of the price movements in the July Consumer Spending Index, which is the Fed’s preferred inflation measuring rod, shows 84 percentRise in inclusions
They are also widespread which indicates that they are deeply embedded. No matter how data analysts slice and dice it, the truth is that the U.S. Inflation Rate calls for offset actions. This includes avoiding the direct distribution of stimulus dollars or the minimum family income dollar (although not drastic, invasive measures to cool the economy). Inflation isn’t about increasing prices. The rising price level is the result of an inflated money supply—all those trillions of stimulus dollars now out and chasing harder after goods and services.
How should the political elite respond? Soothsayers, fortunetellers and others can look into the future and talk about what may seem temporary. You can tell the whole story to the public.