As the great James Grant once said (paraphrasing) “The price of gold is the reciprocal of the Fed’s reputation”. That is certainly playing out, and will continue. The Energy Transition and ReRouting Global Supply Chains are both STRUCTURALLY INFLATIONARY. Yet, the Fed remains anchored to their academic vacuum of 2%. This is way beyond quixotic…
Ultimately, when reality deviates from the Fed's models, their default response is reality is wrong and will adjust to their model results. It is an inherent problem as all the PhD's made their reputation on their models so believe they must be accurate.
He is completely correct, they haven't a clue as to what drives inflation. (if we could only point them toward the 7% budget deficits and excessive spending as a place to start it would be helpful)
As the great James Grant once said (paraphrasing) “The price of gold is the reciprocal of the Fed’s reputation”. That is certainly playing out, and will continue. The Energy Transition and ReRouting Global Supply Chains are both STRUCTURALLY INFLATIONARY. Yet, the Fed remains anchored to their academic vacuum of 2%. This is way beyond quixotic…
well said!
Ultimately, when reality deviates from the Fed's models, their default response is reality is wrong and will adjust to their model results. It is an inherent problem as all the PhD's made their reputation on their models so believe they must be accurate.
He is completely correct, they haven't a clue as to what drives inflation. (if we could only point them toward the 7% budget deficits and excessive spending as a place to start it would be helpful)