Easy Money Quote Of The Day: Fed "Won't Take The Punch Bowl Away"

Daly: ”We are not going to take this punch bowl away.”

Medal Awards

  • Gold Medal (by a mile):  Mary Daly
  • Silver Medal: Jerome Powell
  • Bronze Medal: Thomas Barkin 

2% Inflation Target

The Fed's 2% inflation target is monetary insanity.

Full speed ahead with the stimulus in search of inflation that would be visible to anyone who was not wearing groupthink blinders.

I have a set of questions for Fed Chair Jerome Powell on inflation. Please read them: Hello Jerome Powell We Have Questions.

He would not recognize inflation if it jumped off the table and spit grapefruit juice in his eyes.

As discussed previously, Inflation is Poised to Soar, 3% by June is "Almost Certain"

Historical Perspective on CPI Deflations

A BIS study of deflations shows the Fed's fear of deflation is foolish. 

"Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive," concluded the study.

For discussion, please see Historical Perspective on CPI Deflations: How Damaging are They?

Japan has tried what the Fed is doing now for over a decade, with no results.

Yet, Powell hell-bent on producing more than 2% inflation until the strategy "works".

I discuss numerous ways Powell is on the Bank of Japan's path in Is the Fed Blindly Following Failed Policies of the Bank of Japan?

What Would I Do?

For the answer, please see Reader Question: What Would I do Differently Than the Fed?

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