[quote=deadzone]Have you looked at the chart of the Fed Balance sheet? [/quote]
Yes, and while that chart is certainly concerning, I don’t share the belief that that chart proves the fed caused all the inflation we are seeing.
[quote=deadzone]
If the Fed policy doesn’t control everything then why do the financial markets literally move based on Fed action (or inaction). Do you ever watch CNBC or other financial news?
[/quote]
Sorry, I just find this argument to be, “Everyone else believes this, it must be true.” Which to me is not a reason to go along with the crowd, but a reason to step back and question the wisdom of this view.
[quote=deadzone]
The Free money given away by the US Treasury for Pandemic relief was because the Fed printed trillions of dollars and purchased US Treasury bonds. If it were up to a free market, or without Fed money printing, those trillions of pandemic giveaways couldn’t have occurred.
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hmmmm…. I don’t think I agree. My guess is that fed buying US Treasuries helped the US govt. but I think the US govt. probably could have floated a lot of bonds without the feds help. They might have had to pay a bit more interest, but I’m unconvinced that without the feds QE policy the US govt. wouldn’t have been able to give away all the money they did. (Or least close to what they did.)
[quote=deadzone]
But you are right it is impossible to know exactly how much of the inflation is caused by Fed money printing (i.e. QE) compared with the other factors.[/quote]
So, if you really mean what you say, that we can’t know how much inflation was caused by the fed, then you have to agree that maybe they aren’t nearly as effective as people claim. If we don’t know how much inflation was caused by the fed, we probably also don’t know how much inflation we are seeing is from fiscal policy, supply shortages, Ukraine war and companies reevaluating their pricing strategies. And if that’s true then maybe it’s time to admit that maybe, just maybe, the fed really doesn’t matters all that much. (And that’s my point.)
