Is Inflation In Your Best Interest, Or The Feds?

Is Inflation In Your Best Interest Or The Feds?

“We want to see American citizens pay higher prices for milk, butter, eggs, bread, and toilet paper. To reach our goal, we will adjust monetary policy to make these goods and other goods and services more expensive in the future.”

How long before mobs storm the Mariner Eccles building (Fed headquarters) if Jerome Powell were to make such a statement?

Is our mock proclamation that different from Powell’s comment on 12/16/2020:

“With inflation running persistently below 2%, we will aim to achieve inflation moderately above 2% for some time so that inflation average is 2% over time and longer-term inflation expectations remain well-anchored at 2%.

During Powell’s most recent press conference, not one reporter asked how the public benefits from paying more for goods and services. Not one reporter has ever asked if inflation benefits all citizens or just a few. On rare occasions do reporters assess the efficacy of the Fed’s inflation target or its monetary operations?

Today we share with you what the Fed, media, and Wall Street will not. By doing so, we help you decide if inflation is for the greater good.


What is Price Stability?

Congress delegates responsibility for monetary policy to the Fed but maintains oversight. They are supposed to ensure the Fed adheres to its statutory mandate of “maximum employment, stable prices, and moderate long-term interest rates.”

What are stable prices? Merriam Webster defines the word stable when used as an adjective, as follows:

  • firmly establishedfixed, steadfast stable opinions
  • not changing or fluctuatingunvarying in stable condition

If the price of a dozen eggs rises from $4.00 today to $5.12 in a decade, would you say the price did not change or fluctuate?

Does firmly established characterize a 28% increase in the price of eggs over ten years (2.5% inflation rate).

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