The Fed Embraces Inflation

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In a speech last week, Dallas Federal Reserve Bank head Richard Fisher covered a lot of ground, innocently noting many problems (the worst of which the Fed has created). He discussed the nation’s massive, long-term unfunded Social Security and Medicare liabilities, putting the amount at roughly $99 trillion.

But what I found objectionable was his temerity in commenting: “We know from centuries of evidence in countless economies, from ancient Rome to today’s Zimbabwe, that running the printing press to pay off today’s bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid.”

Of course, this is exactly the policy the Fed has pursued, will pursue and that Fisher himself has voted for. This is a classic example of the Fed’s MO: Talk tough and run the printing press at full speed.”

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