RE: Why The Fed Can't Win The Battle For Inflation

That was the early 1980s when inflation was wild due to the stagflation of the 1970s, mostly caused by the oil embargo against the US. Paul Vocker, the Fed chair at the time, stepped on the throat of the economy by sending interest rates way up. That killed the inflation and sent it plummeting but also did the same thing to the economy. Inflation is something Central Banks can combat rather easily. The cost is the economy for a while.

Back then there wasnt the ability to navigate around it since technology not much of an impact. When we look at the ability today, if a price of something remains high for too long, we will usually see that offset by new technologies that address the problem. That is why commodities are on an 18-24 months supply cycle. If it extends much past there, on the high price side, alternatives will be developed that smash the price. We saw this with oil after 2008 and 2012-2014 when technology (horizontal drilling) increased the global supply a great deal.

Posted Using LeoFinance ^Beta