ZH: Fed Paper Admits Central Bank Can’t Control Inflation; Finger-Points At Federal Government
#Inflation : MacroEco : https://t.co/nrrwapgzGN
— Bouche Bée (@bouche_bee) September 1, 2022
ZeroHedge reported the following;
Fed Paper Admits Central Bank Can’t Control Inflation; Finger-Points At Federal Government
September 1, 2022
It appears somebody at the Federal Reserve has figured out that the central bank can’t tame inflation, so it’s setting up a scapegoat – Uncle Sam…
A paper co-authored by Leonardo Melosi of the Federal Reserve Bank of Chicago and John Hopkins University economist Francesco Bianchi and published by the Kansas City Federal Reserve argues that central bank monetary policy alone can’t control inflation.
The paper’s abstract asserts, “This increase in inflation could not have been averted by simply tightening monetary policy.”
In a nutshell, Melosi and Bianchi argue that the Fed can’t control inflation alone.
US government fiscal policy contributes to inflationary pressure and makes it impossible for the Fed to do its job.
Trend inflation is fully controlled by the monetary authority only when public debt can be successfully stabilized by credible future fiscal plans. When the fiscal authority is not perceived as fully responsible for covering the existing fiscal imbalances, the private sector expects that inflation will rise to ensure sustainability of national debt. As a result, a large fiscal imbalance combined with a weakening fiscal credibility may lead trend inflation to drift away from the long-run target chosen by the monetary authority.”
There are a couple of startling admissions in this single paragraph.
First, the authors acknowledge that the federal government uses inflation as a tool to handle its debt. In other words, it acknowledges that we’re all paying an inflation tax. …
Second, the paper concedes that merely tinkering with interest rates won’t slay inflation if the government continues to spend far beyond its means.
And make no mistake, the US government is spending far beyond its means. Although the budget deficit is shrinking as emergency pandemic spending programs wind down, the Biden administration continues to spend about half-a-trillion dollars every single month, piling onto the ever-ballooning deficit.
This paper admits what I’ve been saying for months. Government spending is a big problem for the Federal Reserve. Powell and Company continue to insist they will stay in this inflation fight until the end. But Uncle Sam depends on the Fed buying Treasury bonds in order to facilitate its borrowing addiction. As the central bank buys bonds, it creates artificial demand and holds interest rates down. The government needs low interest rates when it’s borrowing trillions of dollars. Without the Fed’s big fat thumb on the bond market, Treasury prices will continue to sink as supply outstrips demand, and interest rates will rise.
Melosi and Bianchi also tacitly admit that the Fed isn’t going to win this inflation fight and warns we could be heading toward stagflation.
When fiscal imbalances are large and fiscal credibility wanes, it may become increasingly harder for the monetary authority to stabilize inflation around its desired target. If the monetary authority increases rates in response to high inflation, the economy enters a recession, which increases the debt-to-GDP ratio. If the monetary tightening is not supported by the expectation of appropriate fiscal adjustments, the deterioration of fiscal imbalances leads to even higher inflationary pressure. As a result, a vicious circle of rising nominal interest rates, rising inflation, economic stagnation, and increasing debt would arise.”
This is exactly what is happening. https://www.zerohedge.com/markets/fed-paper-admits-central-bank-cant-control-inflation-finger-points-federal-government
Yet, the head of the US Federal Reserve is pushing the narrative that by causing pain, the Fed can tackle inflation (see ZH: Powell Warns Of “Economic Pain” From Tightening, Says “Historical Record Cautions Against Loosning Policy Prematurely” World Bank warns of stagflation).
While that may help the inflation rate, government deficit spending is an underlying cause.
Since I expected more deficit spending under the Biden-Harris Administration, I put the following in my book Biden-Harris: Prophecies and Destruction:
Make no mistake about it — massive inflation is coming.
The U.S.A. dollar will ultimately crash and be worthless. That “pride” of American power will be broken (cf. Leviticus 26:19). …
Inflation will eventually hit the U.S.A. extremely hard.
And, one day inflation will be much worse it is than now.
Slowing down the economy to deal with inflation by raising interest rates causes other problems.
Some are concerned that raising interest rates, which is what Jerome Powell is advocating, may push world economies into stagflation or worse.
Yet, it is not JUST deficit spending that causes price inflation–there are also supply and demand issues.
Some, like World Bank President David Malpass point to increasing output instead of moving towards stagflation via higher interest rates and an economic slow-down is a better way to proceed: https://www.bloomberg.com/news/articles/2022-08-26/world-bank-s-malpass-worries-stagflation-persists-on-weak-supply
If the USA government really wanted to reduce the pain of inflation, particularly among lower income consumers, it could do at least two things.
First, it could open up more oil drilling in the Gulf of Mexico, off the California coast, and in Alaska. This would not only bring down the price of gasoline and fertilizer, but also would reduce transportation costs of food and other goods. Its ripple effect over the world economy would cut oil costs, and hence help reduce inflation in other countries.
Second, the USA government could increase incentives for farmers to produce more food. This would directly reduce food price inflation as well as increase the amount of food. This, in turn, would help the world food supply which has been impacted by drought, flooding, the Russia-Ukraine conflict, and other factors.
Food is a basic need. More could be produced.
Yes, if there is more supply this would help reduce the inflation rate as well as generally improve the economies of those that produce more.
Instead, the Bible points to food shortages and food price inflation:
5 When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. 6 And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” (Revelation 6:5-6)
The prophecy of the third horseman of the Apocalypse is starting to come to pass.
If government leaders believed the Bible, they would be willing to take a lot of steps that they seemed to have overlooked.
That said, related to inflation, the Continuing Church of God (CCOG) put together the following video:
Inflation: When Money Fails
Inflation has been higher in 2022 than it has been for decades in the USA, Europe, and many other lands. What are some of the disruptions that inflation can cause? What about hyperinflation affecting places like Venezuela? Did the Book of Haggai predict inflation? Is food price inflation associated with the ride of the third horseman of the Apocalypse? Does sin and government mismanagement cause inflation? Are there physical things one can do about inflation? What about storing food or buying gold? Will gold outlast the USA dollar? Why might some throw their gold in the street as Ezekiel prophesied? What should God’s people do about inflation? What did Jesus teach about food worries? What about seeking the Kingdom of God? Steve Dupuie and Dr. Thiel cover these matters.
Here is a link to our video: Inflation: When Money Fails.
As the Melosi and Bianchi Fed report hints, if governments would not have printed up so much debt money for political and other reasons, inflation would not be as much of an issue.
Jesus warned of famines (Matthew 24:4-8) as part of the beginning of sorrows. The Book of Revelation warned about food shortages and food price inflation associated with the ride of the third horseman of the Apocalypse (Revelation 6:5-6).
Looking to increase food and energy production would seem to better solutions than raising interest rates, but that does not seem to be a high priority for the US Federal Reserve, the Biden-Harris Administration, nor most of the politicians in Washington, D.C.
The Bible warns of food shortages and food price inflation, but leaders who despise the Bible do see what is happening or what will happen.
Some items of possibly related interest may include the following:
Might the U.S.A. Be Gone by 2028? Could the USA be gone by the end of 2028 or earlier? There is a tradition attributed to the Hebrew prophet Elijah that humanity had 6,000 years to live before being replaced by God’s Kingdom. There are scriptures, writings in the Talmud, early Christian teachings that support this. Also, even certain Hindu writings support it. Here is a link to a related video: Is the USA prophesied to be destroyed by 2028? In Spanish: Seran los Estados Unidos Destruidos en el 2028?
Four Horsemen of the Apocalypse What do each of the four horseman of the Apocalypse represent? Have they began their ride? Did Jesus discuss the any of this? Might their rides coincide with the “beginning of sorrows? Do they start their ride prior to the Great Tribulation? Did Nostradamus or any other ‘private prophets’ write predictions that may mislead people so that they may not understand the truth of one or more of the four horseman? There is also a related YouTube video titled Sorrows and the Four Horsemen of the Apocalypse.
The End of US Dollar Dominance Is the USA losing its economic status? What about the petro-gold-yuan? A related video is also available: US Dollar being challenged by Gold-Petro-Yuan.
Who is the King of the West? Why is there no Final End-Time King of the West in Bible Prophecy? Is the United States the King of the West? Here is a version in the Spanish language: ¿Quién es el Rey del Occidente? ¿Por qué no hay un Rey del Occidente en la profecía del tiempo del fin? A related sermon is also available: The Bible, the USA, and the King of the West.
USA in Prophecy: The Strongest Fortresses Can you point to scriptures, like Daniel 11:39, that point to the USA in the 21st century? This article does. Two related sermon are available: Identifying the USA and its Destruction in Prophecy and Do these 7 prophesies point to the end of the USA?
When Will the Great Tribulation Begin? 2022, 2023, or 2024? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede la Gran Tribulación comenzar en el 2020 o 2021? ¿Es el Tiempo de los Gentiles? A related video is: Great Tribulation: 2026 or 2027? A shorter video is: Can the Great Tribulation start in 2022 or 2023? Here is a video in the Spanish language: Es El 2021 el año de La Gran Tribulación o el Grande Reseteo Financiero.
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? Does God have 7,000 year plan? What year may the six thousand years of human rule end? When will Jesus return? 2030 or 20xx? There is also a video titled 6000 Years: When will God’s Kingdom Come? Here is a link to the article in Spanish: ¿Tiene Dios un plan de 6,000 años?
The Plain Truth About Gold in Prophecy. How Should a Christian View Gold? What do economists and the Bible teach about gold? Gold and silver may drop in value. Inflation/deflation? What do Christians need to know about gold?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, English, Scottish, Welsh, Australians, Anglo-Saxon (non-Dutch) Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? What will happen to Jerusalem and the Jews in Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo-Saxon nations? Why might God allow them to be punished first? Here is a link to the Spanish version of this article: Anglo-América & las Tribus Perdidas de Israel. Information is also in the YouTube sermons titled Where are the Ten Lost Tribes? Why does it matter? and British are the Covenant People. A short YouTube of prophetic interest may be: Are Chinese threats against Australia for real?
Will the Anglo-Saxon-Celtic Nations be Divided and Have People Taken as Slaves? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What about Jerusalem? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people? Here is a link to a video titled Will the USA and other Anglo-nations be Divided and Their People Made Slaves? Here is a related item in the Spanish language ¿Serán divididas las naciones anglosajonas?
Is God Calling You? This booklet discusses topics including calling, election, and selection. If God is calling you, how will you respond? Here is are links to related sermons: Christian Election: Is God Calling YOU? and Predestination and Your Selection. A short animation is also available: Is God Calling You?
Christian Repentance Do you know what repentance is? Is it really necessary for salvation? Two related sermons about this are also available: Real Repentance and Real Christian Repentance.
When You Sin: Do You Really Repent? This is an article by Charles F. Hunting. A related sermon is Confess to God and truly repent.
Just What Do You Mean — Repentance? Do you know what repentance is? Have you truly repented? Repented of what? Herbert W. Armstrong wrote this as a booklet on this important subject.
The Gospel of the Kingdom of God This free online pdf booklet has answers many questions people have about the Gospel of the Kingdom of God and explains why it is the solution to the issues the world is facing. Here are links to four related sermons: The Fantastic Gospel of the Kingdom of God!, The World’s False Gospel, The Gospel of the Kingdom: From the New and Old Testaments, and The Kingdom of God is the Solution.
Biden-Harris: Prophecies and Destruction Can the USA survive two full presidential terms? In what ways are Joe Biden and Kamala Harris apocalyptic? This book has hundreds of prophecies and scriptures to provide details. A Kindle version is also available and you do not need an actual Kindle device to read it. Why? Amazon will allow you to download it to almost any device: Please click HERE to download one of Amazon s Free Reader Apps. After you go to your free Kindle reader app (or if you already have one or a Kindle), you can go to: Biden-Harris: Prophecies and Destruction (Kindle) to get the book in seconds.
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