{"id":24270,"date":"2017-06-27T15:40:59","date_gmt":"2017-06-27T20:40:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24270"},"modified":"2017-06-27T15:40:59","modified_gmt":"2017-06-27T20:40:59","slug":"why-the-fed-will-fail-once-again","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24270","title":{"rendered":"Why the Fed Will Fail Once Again"},"content":{"rendered":"

Why the Fed Will Fail Once Again<\/a><\/h3>\n

[Ed. Note: Jim Rickards\u2019 latest New York Times bestseller, The Road to Ruin: The Global Elites\u2019 Secret Plan for the Next Financial Crisis<\/i><\/b><\/a>, is out now. Learn how to get your free copy \u2013 HERE<\/b><\/a>. This vital book transcends rhetoric from the Federal Reserve\u00a0to prepare you for what you should be watching now.]<\/p>\n

John Maynard Keynes once wrote, \u201cPractical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.\u201d<\/p>\n

Truer words were never spoken, although if you updated Keynes today, the quote would begin with \u201cpractical women\u201d to take account of Fed Chair Janet Yellen. The \u201cdefunct economist\u201d in question would be William Phillips, inventor of the Phillips curve, who died in 1975.<\/p>\n

In its simplest form, the Phillips curve is a single-equation model that describes an inverse relationship between inflation and unemployment. As unemployment declines, inflation goes up, and vice versa. The equation was put forward in an academic paper in 1958 and was considered a useful guide to policy in the 1960s and early 1970s.<\/p>\n

By the mid-1970s the Phillips curve broke down. The U.S. had high unemployment and high inflation at the same time, something called \u201cstagflation.\u201d Milton Friedman advanced the idea that the Phillips curve could only be valid in the short run because inflation in the long run is always determined by money supply.<\/p>\n

Economists began to tweak the original equation to add factors \u2014 some of which were not empirical at all but model-based. It became a mess of models based on models, none of which bore any particular relationship to reality. By the early 1980s, the Phillips curve was no longer taken seriously even by academics and seemed buried once and for all. RIP.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Why the Fed Will Fail Once Again [Ed. Note: Jim Rickards\u2019 latest New York Times bestseller, The Road to Ruin: The Global Elites\u2019 Secret Plan for the Next Financial Crisis, is out now. Learn how to get your free copy \u2013 HERE. This vital book transcends rhetoric from the Federal Reserve\u00a0to prepare you for what […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[11023,303,13599,451,458,10324,824,3650],"class_list":["post-24270","post","type-post","status-publish","format-standard","hentry","category-economics","tag-daily-reckoning","tag-fed","tag-james-rickards","tag-janet-yellen","tag-john-maynard-keynes","tag-phillips-curve","tag-unemployment","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24270","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24270"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24270\/revisions"}],"predecessor-version":[{"id":24271,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24270\/revisions\/24271"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24270"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24270"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24270"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}