Inflation. Ouch!


Inflation is the cruelest tax.

The Federal Reserve is tasked with a balancing act. They are supposed to have “some” inflation, but not “too much” inflation. Somewhere around 2% seems to be the consensus (footnote 1). Below is a graph of inflation. The largest drivers of this metric are listed. Wasn’t Obamacare supposed to bend the medical care cost curve downward? I seem to remember our illustrious President promising that to us. Nota bene. There is a bump in 2009. let’s try to remember who became president in 2009.

fec95d68-f122-4b2d-85b9-87dd77879fc6

When the Federal Reserve is buying up trillions of dollars in debt, it is nearly the same as printing trillions of dollars (footnote 2). That is a recipe for hyperinflation (you really should read this post). That would be “bad” in the whole “good/bad” thing.

And thanks to PK for sending this to me.

Roy Filly

Footnote 1: The Fed’s policy committee, the Federal Open Market Committee (FOMC), does not have an explicit inflation target but regularly announced a desired target range for inflation (usually between 1.7% and 2%) measured by the personal consumption expenditures price index.

Footnote 2: The graph below describes the Fed policy to buy federal debt:

fed1

Once again, do you remember what happened in 2009?

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About Roy Filly

Please read my first blog in which I describe myself and my goals.
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One Response to Inflation. Ouch!

  1. Flayer says:

    So why, oh why, is Obama so popular at over 50% approval? I blame George Bush for never defending himself. He was too much of a gentleman and respected the dignity of the office to engage with the gutter snipes. Ok. So I prayed for a street fighter because we are not dealing with an opponent that plays by the Marquise of Queensberry Rules. Now “our” side is complaining bitterly because they want us to lose with dignity, as we did with the patrician Romney. Well, sorry. I’m not going along with that. Trump 16 for so many, many reasons.

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