The unelected entity and purveyor of chaos, better known as The Federal Reserve, will issue its latest edicts today and the guardian of the dual mandate of 2% Inflation and Full Employment is brewing up, nothing short of a disaster.
Strident in maintaining its foot on the monetary policy gas, blowing way past 2% inflation and with unemployment now at pre-pandemic levels, the Fed is now concerned about inflation. Never mind the gigantic blunder in terming it “transitory” (now removed, after the fact, of course), but the hubris in that it could control/manage the effects, when history has shown the Fed policy pendulum, always swings beyond reason, is mind blowing.
Bernanke got it wrong; Yellen got it wrong; Powell got it wrong. Sense a pattern here. Every Fed Chair had the opportunity to raise interest rates or eliminate “emergency measures,” but chickened out as one excuse or another prevented them from doing what was NEEDED, not wanted.
Economic markets need cycles, not a safety net. It is healthy for excesses to be corrected (read: Lose Money) so it doesn’t become “policy”. Eradicate moral hazard and that is one big way to control risk taking, both in the public and private sectors.
We are about to embark upon a period of ‘Wringing out the Excess’, in what will be higher prices, lower investment returns and dare I say, the return of delayed, not instant, gratification. Dust off your sound money principles, like living within your means and whereas the road ahead for many (debt-laden) will be turbulent, your financial future will be secure.
