Inflatulence

Asheville NC

Description

Suppose the politicians and the Fed were not as dense and optimistic as they appear to be. Suppose they knew that the mountain of debt they have created has forced us into a corner where the only real choice is recession or inflation. Suppose they chose inflation. Suppose they did not want us to realize that their strategy is to accept inflation. What sort of posturing would they do to convince us otherwise. I suspect they would start out by minimizing and blaming. It’s only transitory. The supply chain did it to us. Then they would say that they were going to stay the course and tighten as much as needed. Then they would say that they were stopping giving guidance, because, after all, we are at “neutral.” The obfuscations need to be spread out over time, so that the public will forget the obvious. Decades ago, Milton Friedman observed that it takes about 2 years for a major stimulus to produce its yield of inflation. This is not new stuff, but we can pretend it is new. Hot air and inflation just go together.