The Federal Reserve’s efforts to produce inflation are flaccid
People are wrong about face-ripping inflation.
I’ve said it before: the Federal Reserve, at least currently, is a lender — not a spender. Yet, people picture the Federal Reserve raining down money from the sky, but that’s now how this works. The Fed, currently, can’t drop cash on people. Sorry, the Fed isn’t some all-powerful entity the runs factories, makes babies or forgives debt. Some think inflation is a simple concept, but with all due respect, I must disagree.
If the Federal Reserve was given the power to send monthly payments to everyone, especially if times are already ‘good,’ then I would worry about inflation. In other words, consumer prices: I’m not talking about asset “inflation.”
Why is this? It all has to do with the velocity of money. That’s what reveals what you and I think of as inflation (i.e. consumer prices going way up).
