Normally, when inflation is high, the Federal Reserve will increase the FEDFUNDS rate which discourages banks borrowing money in order to fund investments. This in turn discourages lending and generally increases borrowing costs across the economy - including borrowing costs for the national debt.
When you subtract it from the YoY inflation numbers, you can see inflation before and after a government response. Notice in the 70s, inflation peaked before the FED kicked into gear and raised rates. Today, we are at a much higher inflation before a FED response. You would think if they wanted to respond, they would have earlier than the they did in the 70s, but today, it is later. Why? I think they are trying to gain control over inflation through talk only. When rates go up, so do interest payments and we'll see a systemic collapse of asset prices / GDP, and in turn government revenue followed by insolvency.
Good luck, FED.
When you subtract it from the YoY inflation numbers, you can see inflation before and after a government response. Notice in the 70s, inflation peaked before the FED kicked into gear and raised rates. Today, we are at a much higher inflation before a FED response. You would think if they wanted to respond, they would have earlier than the they did in the 70s, but today, it is later. Why? I think they are trying to gain control over inflation through talk only. When rates go up, so do interest payments and we'll see a systemic collapse of asset prices / GDP, and in turn government revenue followed by insolvency.
Good luck, FED.
