The Federal Reserve’s claim of temporary inflation does not signal the end of inflation; rather, it signals an increase in inflation. They are making us fools by not informing us of impending inflation. Only the Fed can persuade people to exchange their cash currency for gold. So far, the Fed regards inflation as a farce. The term “persistently transitory” is coined by one analyst. That’s right up there with “deafening silence” and “genuine imitation” as the best oxymoron contenders.
Last week, Atlanta Fed President Raphael Bostic publicly referred to transitory as a “dirty word.” He used swear word’ after depositing a dollar in a jar with a ‘transitory’ label. According to Bostic, the period of the increasing period may not be considered brief.
Prolong inflation, what does it mean?
Simply put, it means we’re approaching a difficult period. Wharton finance professor Jeremy Siegel believes that inflation is a much bigger problem than the Fed claims. What will the volume be like? Last week at the Forbes Advisor Summit, Siegel predicted that it would be between 20% and 25% in the next few years.
When the Fed introduces trillions of dollars into the required reserve of the bank, which must be maintained with the Fed, it does not affect the consumer price hike because it is not floating in the consumer market. The printing dollars have now entered the market.
Quantitative easing (buying long-term securities) is important, but it has far-reaching consequences if monetary policy is conducted at the expense of money, according to Siegel. I did not expect inflation from quantitative easing during the tenure of former Federal Reserve Chair Ben Bernanke, but what Jerome Powell and the Federal Reserve are doing now will result in inflation. Price inflation of 5% to 7% is expected in the coming years, according to Siegel.
The price of a barrel has already surpassed $80. The price is expected to rise by 25% in the next few months, according to Bank of America’s forecast. The cost will be more than $100 during the winter season. Food and energy prices are already high, and as we predicted a week ago, they will continue to rise.
Those who believe that inflation will be temporary are repeating the history of the 1970s, according to Stephen Roach, a former Morgan Stanley Asia chair who now works at Yale University. OPEC restrictions and El Nino weather patterns were also mentioned at the time. They overlook the fact that the Fed is floating money in the market.
The fact that there is a strong correlation between demand and supply factors and central bank asset holdings is completely unknown to central bankers. As a result, there is a lot of confusion about inflation, according to Roach. The earlier darker period’s history will be repeated even more forcefully. For about ten years during the dark period, average inflation remains at 6.8%. Washington has spent $5.7 trillion on relief and incentives in the last year and a half. There is now a plan to spend an additional $3.5 trillion. What will be the funding sources for such expenditures? The only way to get money is to print it. Your dollar salary and savings value will be significantly impacted by the printing. As a result, there will be noticeable inflation of 5%.