Re: The Fed holds back the economy intentionally because of their false claim that economic growth causes inflation.
I disagree.
The Fed actually has a monetary policy “target” rate of inflation at 2% per year.
It would be nice if someone at the Fed, or Donald Trump, would explain to the public why they think it is a good thing if consumer prices increase 100% every 36 years!
Since the bottom of the Great Recession in 2009, the Fed has increased short term interest rates from 0% to 2.25%
I flat out do not believe that any American business person has decided not to expand, or has decided not to create a new business, based on a 2.25% interest rate increase.
Trump wants to wage a currency war with other large exporting nations like China, Japan, and Germany.
He wants a “weak” U.S. Dollar so our export prices will come down a couple percentage points.
When has a weak U.S. Dollar ever helped the USA economy in modern times?
From memory, exports are less than 20% of the USA economy.
A weak Dollar harms the average USA citizen by making prices for everything else go up.
Chinese imports are about 2.45% of the USA economy (2017)
A weaker dollar makes our exported goods less expensive to other countries, making us more competitive.
You never want to have the strongest currency if you want job growth and rising exports to close the trade gap...
According to Google, exports were just 12% of the American GDP in 2017.
It would be nice if someone at the Fed, or Donald Trump, would explain to the public why they think it is a good thing if consumer prices increase 100% every 36 years!
...
It’s not. The Fed causes inflation when it pumps money into the economy to recover from a recession. The Fed causes recessions by manipulating interest rates too high. The Fed keeps rates too high to slow down the economy, because of their false claim that economic growth causes inflation.
Economic growth does not cause inflation.