BIDEN ECONOMY: Fed is Raising Rates Faster and Higher – And Inflation Is Still Out of Control

The Fed believes it has never had to raise rates higher and faster than at any time in the past 40 years to prevent Biden’s inflation from putting the US economy into a depression.

The problem is that the Fed either doesn’t understand what’s happening or they do and are intentionally scuttling the economy.

Typical inflation occurs because the economy is booming and people have more money. This leads to competition for limited resources and people then pay more to acquire these goods. For that type of scenario, increasing interest rates can help as it makes it harder to get loans.

In the current situation this isn’t what’s happening. The current inflation is NOT due to a heated economy, it’s due to government spending and the wild “printing” of money that is being done to support it. This lowers the value of the dollar which means it takes more to buy the same thing. Add in a broken supply chain which reduces the available of goods and we have runaway inflation. In this scenario, increasing interest rates has the opposite of the intended effect.

Manufacturers are unable to fix the supply chain issues with tighter credit, labor costs are up because too many people are being paid to not work, and discretionary spending is way down since literally everything costs more. Raising interest rates means financed purchases are way down, furthering the problem.

This is not an organic inflation, this is caused by government actions. The old methods of controlling inflation are useless in this environment and are in fact contributing factors.

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