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Why the Federal Reserve has made a historic mistake on inflation

1 pointsby colsabout 3 years ago

2 comments

incomingpainabout 3 years ago
Ctrl F &quot;why&quot; and it&#x27;s only the title. In the article I don&#x27;t see the why.<p>The why is simple. Trump signed the cares act for 2.2 trillion: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;CARES_Act" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;CARES_Act</a><p>then Trump signed for another 2.3 trillion: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Consolidated_Appropriations_Act,_2021" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Consolidated_Appropriations_Ac...</a><p>then biden signed 1.9 trillion: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;American_Rescue_Plan_Act_of_2021" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;American_Rescue_Plan_Act_of_20...</a><p>None of this was funded because people sat at home unemployed not working and therefore not paying taxes. So you have 6 trillion in new spending and X amount less in revenue. It&#x27;s a bad news bears situation.<p>It&#x27;s worse, the fed trying to pay for this 6 trillion went even further and sent their central bank balance into space. VERY far from any balance, just to keep various markets from melting down. They essentially printed a ton of money. They can&#x27;t raise rates, it basically destroys everything they have done. Yet they better start raising rates. So these &#x27;assets&#x27; according to the fed are in fact liabilities.<p>The consequences arent even all realized yet. USA will very likely lose their reserve currency status and start feeling their debt for the first time.<p>So in hindsight... was it the right thing to do? These are going to be some global impacting consequences. Was covid really that bad? Were there better options?
colsabout 3 years ago
Archive: <a href="http:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20220421140918&#x2F;https:&#x2F;&#x2F;www.economist.com&#x2F;leaders&#x2F;2022&#x2F;04&#x2F;23&#x2F;why-the-federal-reserve-has-made-a-historic-mistake-on-inflation" rel="nofollow">http:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20220421140918&#x2F;https:&#x2F;&#x2F;www.econom...</a>