Guest Post by Ron Paul
The Federal Reserve’s recent 0.75 percent increase in its “benchmark” interest rate is the Fed’s highest rate increase since 1994. This increase is a sign that the Fed has finally realized that price inflation is more persistent and widespread than the Fed initially believed.
Stocks have fallen much lately. This is in part because of fears rate hikes will push the economy into recession. The Fed itself seems to believe that the economy is going to slow down in the near future, as it has reduced its projection of 2.2 percent economic growth in 2022 to 1.7 percent. Even more ominously, the Atlanta Fed’s GDP tracker fell to zero for the second quarter of 2022, due in part to May’s weak retail sales.
The Fed claims it will reduce inflation without significantly increasing unemployment or causing a recession. This is likely to be as accurate as the Fed’s prediction that inflation was “transitory.”
This latest rate increase will only raise rates to where they were before the lockdowns led the Fed to embark on a historic money-creating spree. The Federal Reserve cannot increase rates to anywhere near the level they would be in a free market because doing so would increase interest payments to unsustainable levels for debt-ridden consumers, businesses, and the federal government.
Increases of a couple percent or less in interest rates can cause big increases in federal debt payments. The resulting new spending puts pressure on the supposedly “independent” Fed to maintain low rates, making it more likely the Fed will fail to tame inflation but succeed in resurrecting stagflation, combining price inflation with a recession. This new stagflation will make the 1970s look like a golden era.
Despite the skyrocketing debt and the Fed’s role in creating inflation, there are few in Washington committed to spending cuts. Congress is currently getting ready to authorize an across-the-board spending increase for next year. Meanwhile, the US government is spending tens of billions of dollars this year related to Ukraine, and the Biden administration is still pushing for massive new domestic programs.
The return of stagflation will increase the growing movement to replace the dollar as the world reserve currency. This will be the final nail in the welfare-warfare-fiat money regime’s coffin. History shows that such a crisis usually results in people embracing some form of authoritarianism. However, if those of us who know the truth are effective in spreading the ideas of liberty, this crisis can result in a turning to the principles of minimal government and maximum liberty.
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What? No plug for his homeschool curriculum at the end??
Ms. Abbey, no pun intended, Ron Paul was born and raised by a very reputable farming family in Pennsylvania. Ron even drank raw milk. A little man , yet not a boaster and definitely not raised by unscrupulous family in Queens , New York.
Don’t know about a home school curriculum, even if flawed, got to be way better than Trump U. 🙂
I am making $92 an hour working from home. i was greatly surprised at the same time as my neighbour advised me she changed into averaging $ninety five however I see the way it works now. I experience mass freedom now that I’m my non-public boss.
That is what I do.. http://www.profit97.com
Fuk off U POS
The fed is always behind the curve and overreacts.
Yep, after years and years and years of kicking the can down the road by these congress critters, who knows, people may have to try to go live with the jerks that have created one mess after another. Maybe they will let us pitch a tent inside their gated communities?
Watch them give themselves another “raise”. VOTE HARDER!!!
The Fed exists to drive fraudulent, risk-free gambling gains for its private owners by artificial price inflation and/or suppression of paper/electronic assets, either through veiled or explicit insider schemes. Electronic trading execution is literally the biggest corrupt scam to ever enveil the public economic interest, in the history of financial scams.
.
What aspect of these alleged ‘markets – exactly – serves the actual productive economy besides the occasional IPO? Entities that sell assets that they never possessed, never took delivery of, and never factored in the production of, are not only of no actual ‘market’ value, they are deleterious middle-men imposed onto the productive economy that they are parasitic upon.
Paul has long been a rare voice on sound fiscal and monetary policy, but the concept of international ‘free markets’ is a unicorn hunt for something that never has and never will draw breath on this planet.
You will always have either a nation state that serves its own populations financial interests,
or a sold-out globocap system that cheats the general public out of its birthright while piously lecturing them on some manmade commercial ideological construct.
There is no free market, because this is a misnomer in human affairs.
There is national self-interest, in which profit at all costs is constrained by national ‘fair trade’ principles, or there is global casino speculation that enriches those who are incentivized to create boom/bust in order to most effectively strip-mine the producing economy.
The myth of a middle ground sustains the latter, and we have the latter.
Cogent and well said.