“Raising interest rates isn’t working, and the Fed’s overly aggressive actions are shoving our economy to the brink of a devastating recession,” said Rakeen Mabud, chief economist at the progressive Groundwork Collaborative think tank. “Supply chain bottlenecks, a volatile global energy market and rampant corporate profiteering can’t be solved by additional rate hikes.”
While accusations of “corporate profiteering” is pure horse hockey—profit is the name of the corporate game—the idea that interest rate hikes do nothing to address supply side issues is spot on. Most if not all of the inflation we are seeing today is a reflection of exogenous supply shocks coming as the aftereffects of the COVID-19 lunatic lockdowns.
The grim reality of political economics is that while merchants and manufacturers prefer sound money, governments and financial speculators abhor sound money.
Going back to the Roman Empire and beyond, there has never been a single government that has not debased its own currency for the sake of spending more.
As much as ordinary citizens would benefit from a gold standard, going back to the gold standard is a political impossibility. Unsound money will always prevail over sound money, because that's what the governments want.
Go back on the gold standard. If there’s any gold left.
Abolish the Fed.
Abolish the 16th amendment.
Let the free market reign.
Unleash energy.
The grim reality of political economics is that while merchants and manufacturers prefer sound money, governments and financial speculators abhor sound money.
Going back to the Roman Empire and beyond, there has never been a single government that has not debased its own currency for the sake of spending more.
As much as ordinary citizens would benefit from a gold standard, going back to the gold standard is a political impossibility. Unsound money will always prevail over sound money, because that's what the governments want.
"Now if only the Federal Reserve can catch a clue and craft a new strategy on inflation."
What should that strategy be? If you were given absolute power over Fed policy, what would you do?