For those who have noticed prices skyrocketing and the value of paychecks eroding it may come as a surprise that the Federal Reserve believes inflation is too low and is sitting below its target rate of two percent. One contrarian economist purports this whole policy is a “con job.”
Writing on his Contra Corner blog Tuesday, David Stockman, former Reagan budget director and author of “The Great Deformation,” explained that the United States central bank has missed its target for more than two consecutive years, but yet consumers’ savings and paychecks are eroding and have lost 3.3 percent in that same time.
In other words, if inflation is very low why are consumers suffering from an inflationary economy? It’s because the whole myth being promoted by the century-old institution is nothing more than a “Keynesian con job.”
“Indeed, the very idea that the hard-pressed main street consumers of America — most of whom have virtually no discretionary income to spend after the basics anyway — will go on a buyer’s strike if they don’t get enough inflation is just plain ludicrous,” Stockman averred.
“Supposedly, if inflation is a tad on the weak side, or even remotely veers off in the direction of the dreaded ‘deflation’ zone, consumers will sit on their wallets waiting for prices to fall further,” noted Stockman. “Soon you are sliding down the slippery slope into the maws of a deflationary malaise, and then Great Depression 2.0.”
He added that reporters, economists and television pundits who regurgitate what the Fed says when it comes to injecting the country with more inflation should start to scrutinize their own reasoning and rationale immediately.
“That Keynesian central bankers peddle this nostrum with a straight face is amazing in itself, but it is at least understandable because it gives them a reason to keep the printing presses humming,” said Stockman. “That journalists like Mr. Torres at Bloomberg repeat it with no questions asked is even more remarkable. It proves that the impending replacement of financial journalists with robo-writers may not be so bad after all. It won’t make any real difference.”
The Fed has been a con perpetrated on the American people since 1914.
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