1 Sep 2022 12:03 pm
The point is, the Fed cannot increase rates without bringing about the financial collapse of the US government. Under different conditions without such a preposterous debt I agree. The Fed would be wise (under conditions of low debt) to increase rates to curb inflation. This is in fact the Feds ONLY useful tool for combating inflation. But this is a hypothetical and the debt is there at present.NEILCAR » 01 Sep 2022, 5:38 am » wrote: ↑ well, as long as the dem keep spending ... inflation will increase ... and the Fed will have to raise the rates.
As long as the Dems keep spending (and they will) the Fed is powerless to combat the inflation. Wise fiscal policy is not in Democrats nature and they lack the understanding you can't "borrow your way to prosperity". It is like asking a scorpion to act like a frog. It isn't in their nature. So I believe what will likely happen is the Federal Reserve will make half-hearted attempts to raise rates which are completely incapable of addressing the level of inflation. They will make (and have been) public statements threatening to raise rates commensurate with the level of inflation. But they won't follow through because they can't. It is the Fed's hope that threatening to increase rates will have the same desired affect. And it will to a certain extent as people listen to such threats of rate increases to come when making decisions today. But threats can only go so far as the mathematics remains the same unless they ACTUALLY raise rates sufficient to curb the inflation. So it is doomed to failure.
My prediction is the dems will spend us into hyper-inflation. The fed will threaten to dramatically raise rates. Inflation will continue to exponentially rise to a point beyond any hyper-inflation the world has ever known. World-wide collapse in time and world conflict is often the result. How long they can stave off the inevitable is uncertain.