> The way I see it is NOW, the fed has itself backed into a corner. <
Agreed. And as you noted, they cannot safely raise interest rates. So it’s either default on their bills, or let inflation run wild. I’m guessing it will be the latter option.
And in a way, that will work out for them. The government can then repay its debt with inflated paper. Of course, that won’t work out so well for the average guy. But who cares about him?
100%
It will collapse the banks. All those fixed rate home loans.
Then they will try to loan money for inflated property.
What will they do?
Just like Hitler did. Start a war. That economy was right on the verge of collapse until he started that war. Then they transferred the inflation to the countries they took over. Robbed, pilfered every single thing that wasnt tied down.