{"id":58992,"date":"2021-08-13T06:56:04","date_gmt":"2021-08-13T11:56:04","guid":{"rendered":"https:\/\/olduvai.ca\/?p=58992"},"modified":"2021-08-13T06:56:04","modified_gmt":"2021-08-13T11:56:04","slug":"more-money-doesnt-mean-more-wealth","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=58992","title":{"rendered":"More Money Doesn\u2019t Mean More Wealth"},"content":{"rendered":"
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More Money Doesn\u2019t Mean More Wealth<\/a><\/h3>\n<\/div>\n<\/div>\n<\/section>\n
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\"More<\/p>\n
Photo by\u00a0Shane<\/a><\/span><\/div>\n<\/div>\n

<\/a>The Federal Reserve has targeted a 2% inflation rate for years, as though it\u2019s a holy grail. As though 2% inflation was an economic panacea that would perfectly balance employment, business investment and bank lending.<\/p>\n

Recently, the Fed has loosened the reins on inflation and let it charge ahead. Quite a bit \u2013 two consecutive months over 5%,\u00a0two and a half times<\/i>\u00a0their self-imposed target.<\/p>\n

For many, the big question is whether this is (to use Chairman Powell\u2019s much-maligned phrase) \u201cmerely transitory,\u201d a \u201cblip\u201d caused by supply-chain disruptions and post-pandemic recovery that\u2019ll work itself out soon\u2026<\/p>\n

Or whether this is more akin to Carter-era inflation. The kind that shows up unannounced like college acquaintance, invites itself in and makes itself at home on your sofa. Finds the remote, turns on a game, and settles in for the long haul.<\/p>\n

There\u2019s no crystal ball. Instead, we have the bond market (it\u2019s the next-best thing), which has consistently predicted long-term inflation rates of\u00a02% or less for the last 20 months<\/a>.<\/p>\n

Is this proxy for a crystal ball cracked? Possibly. Many analysts point to the Federal Reserve\u2019s insatiable demand for Treasury bonds, claiming that distorts the bond market and its signals beyond human interpretation.<\/p>\n

Some voices have given up on condemning inflation, and instead have chosen to welcome it.<\/p>\n

Inflation raises worker pay!<\/strong><\/p>\n

Here\u2019s a rather hilarious \u201cexplainer\u201d on the\u00a0economic benefits of inflation<\/a>. The best part:<\/p>\n

Rising prices make it easier for companies to put up wages. They also give employers the flexibility not to increase wages by as much as inflation, but still offer their staff some sort of raise. In a world of zero inflation some companies might be forced to cut wages.<\/p><\/blockquote>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

More Money Doesn\u2019t Mean More Wealth Photo by\u00a0Shane The Federal Reserve has targeted a 2% inflation rate for years, as though it\u2019s a holy grail. As though 2% inflation was an economic panacea that would perfectly balance employment, business investment and bank lending. Recently, the Fed has loosened the reins on inflation and let it […]<\/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":[18769,124,303,309,426,534,538,3650],"class_list":["post-58992","post","type-post","status-publish","format-standard","hentry","category-economics","tag-birch-gold-group","tag-central-banks","tag-fed","tag-fiat-currency","tag-inflation","tag-monetary-policy","tag-money-printing","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58992","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=58992"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58992\/revisions"}],"predecessor-version":[{"id":58993,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58992\/revisions\/58993"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=58992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=58992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=58992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}