It

 

ought to sound a lil familiar:

Why This is the Most Reckless Fed Ever...

"As stunningly and mindbogglingly bizarre as this sounds, it’s reality: Inflation has been spiking for over a year, getting worse and worse and worse, while the Fed denied it by saying, well, the economy is recovering, and then it denied it by saying, well, it’s just the “base effect.” And when inflation blew out after the base effect was over, the Fed said it was a “transitory” blip due to some supply chain snags. And when even the Fed acknowledged last fall that inflation had spread into services and rents, which don’t have supply chains all over China, it conceded that in fact there was an inflation problem – the infamous pivot.

By which time it was too late..."

"And all along – despite our screaming in the trenches – the Fed stuck to its “transitory” nonsense, while continuing to throw huge quantities of gasoline on the already raging fire, by interest rate repression and money-printing, as only a true inflation arsonist would."

(Somebody said when COVID hit that inflation would be a problem and that money printing would be the cause...who said that? I look like I got a MBA?)

"The most reckless Fed ever.

So now we have this crazy situation, (Yup!) where the Fed is still repressing the effective federal funds rate (EFFR) to 0.08% while CPI inflation is raging at 7.9% and will likely go over 8% soon.

Back in the days of high inflation – the 1970s and 1980s – there were moments when CPI inflation was at 7.9%, crossing it either on the way up or crossing it on the way down.

But at those moments when CPI was 7.9%, the EFFR was:

Oct 1973, inflation shooting higher, EFFR = 10.8%

Sep 1975, inflation declining: EFFR = 6.2%

Aug 1978 inflation shooting higher: EFFR = 8.0%

Feb 1982, inflation declining: EFFR =14.8%

And this is what this absurdity looks like, going back to 1955, when the EFFR data begins. Red line = CPI; purple line = EFFR. This chart documents why this is the most reckless Fed ever:

"

(You see the red line to the far right? 

That's inflation. 

See the blue line at the bottom to the far right? 

Thats interest rates. 

We have got to get the blue line over the red line or it just keeps going up. 

Think of it this way, what happens to your credit card or mortgage payment when it goes up by 8%?

There's a reason analyst keep saying six .25% point increases this year. That's only 1.5%. Nowhere near close enough to taming inflation. There's a reason analysist don't talk about going much above a 1.5% increase in interest rates, they know what happens at 2.5% (Housing market crash) and 4.5% (Default on the interest payment on the national debt).

Beijing and Moscow know all this.

I figure you should too.

(Other people wish I was just washing dishes somewhere or stocking paint...not doing my job as a watchman. Well?...Tough.)

"But wait… there was a small group of huge beneficiaries from the Fed’s policies.

The Fed has long had as its official monetary policy goal the “wealth effect.” The wealth effect has been promoted in numerous Fed papers, including by Janet Yellen in 2005, when she was still president of the San Francisco Fed. Under this doctrine, the Fed used monetary policies (interest rate repression and QE) to inflate asset prices that make asset holders (the already wealthy) even wealthier. The idea is that the even-wealthier spend a little of this money, and that this will trickle down somehow.

"But wait… there was a small group of huge beneficiaries from the Fed’s policies.

The Fed has long had as its official monetary policy goal the “wealth effect.” The wealth effect has been promoted in numerous Fed papers, including by Janet Yellen in 2005, when she was still president of the San Francisco Fed. Under this doctrine, the Fed used monetary policies (interest rate repression and QE) to inflate asset prices that make asset holders (the already wealthy) even wealthier. The idea is that the even-wealthier spend a little of this money, and that this will trickle down somehow.

(Revelation 6:6

Then I heard what sounded like a voice among the four living creatures, saying, “Two pounds of wheat for a day’s wages, and six pounds of barley for a day’s wages, and do not damage the oil and the wine!”

The rich get richer and the poor get poorer anybody?

"Theory? It's an excuse to give money to the rich!" My dad on trickle down economics circa 1979"

The author (and I know it's just a guys blog/website whatever he just happens to be 100% correct on these issues) goes on to purpose a bunch of policy changes that would reverse this situation but just like he said in the beginning: "By which time it was too late..."

Maranatha.

I love you baby.