And, as economist Carl Pellegrini pointed out this morning:
“The Fed is not tightening. If it were, do you really believe that the growth in commercial paper outstanding would be 18.4% for the last few weeks; and that bank loans and commercial paper outstanding would be up a seasonally adjusted rate of 24.6% for the last seven weeks, 15.7% for the last 13 weeks, and 13.35% for the last 52 weeks?” Thus, not only is the Fed not tough, but it has no real intention of being tough — though it talks that way so it can save its reputation, as I noted yesterday.
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As the Fed has repeatedly stated, its mission is to reduce EXPECATIONS of inflation. That’s the key. While they talk about inflation, their goal to reduce it, and raise interest rates, they keep the liquidity bubble going.
How can this keep inflation down? Won’t the liquidity bubble raise inflation?
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