No. of Recommendations: 2
The article concludes with this sentence:

"It's time for the punch bowl to go."

I think the article does a poor job of identifying the present causes of increasing inflation (the chief of which I see to be public and private deficit spending), and it places entirely too much emphasis on the Fed (and its limited tools) as the cure.

One possible counter-measure to inflation would be for the Congress to run a balanced budget, spending no more than actual incomes permitted. Another counter-measure to inflation would be to back away from the increased militarization of this country and its foreign follies, which have mostly served to escalate the price of oil which is one of the chief components of inflation.

The Fed's tinkering with interest rates amounts to the tail wagging the dog. Violent wiggles, i.e., very high rates, will have an effect. But the better strategy is to put the dog of spending on a very short leash. But the will to do so isn't there. So the Fed will hike, and the economy will fold, and everyone will blame everyone but themselves.

Not a happy situation.


Print the post  


Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.