The FED has failed to make any kind of impact on the economy.
They want to see inflation go down but they have no real authority to make that happen.
So they continue to do the one thing that they can do and that is to raise the interest rates.
Sadly that has not worked and it will not work tomorrow or the day after that and we could say the same thing over and over again but nothing will change because it appears that people do not understand why nothing is changing.
Why raising interest rates does nothing to stop inflation.
The truth is something that is sometimes difficult to hear and even harder to understand.
When it comes to the economy sometimes the simple truth gets lost in the belief in things that just are not so…
America and the world have watched closely how often the FED has continued to raise rates while thinking that by so doing inflation can be reduced…
The truth here is that manipulating the interest rates and believing that this will cause inflation to go down is just foolishness.
The reality is that all this does is to transfer the inflation from one set of people to another.
The idea is that by increasing the cost to borrow money will cause inflation to go down however this is just not true.
What is happening is a continuation of a failed policy that should have been changed but because the FED really has no real power to change the economy all they can really do is to allegedly to make things worse.
Basically what they are trying to do they can’t do so they do all the wrong things in an effort to try to make things better while continuing to fail to do the one thing they want most.
Sound confusing well it is and the reason why this is true is a simple one.
The FED has no authority or mandate to be in charge of the economy or the housing market or the labor market yet they keep trying to do the same thing over and over again while only allegedly doing harm…
They say doing the same thing over and over again and expecting a different result is insanity…
But that is exactly what the FED is doing…
What can the FED do then?
They can disrupt the economy they can make it hard on Americans who want to buy a home.
They can make it difficult on people who want to buy a new car.
They can make it hard on businesses to be able to open a business.
They can make it difficult for businesses to hire new employees for a new business.
They can do all of these things that end up hurting everyone while helping no one.
That is what the FED can do and they are doing it well over and over and over again…
When you make a mistake you must be able to learn from that mistake or you end up continually making the same mistakes over and over again.
Like raising the interest rates to try to manipulate the economy.
IF the idea here is to destroy the economy by trying to manipulate the interest rates but failing to impact inflation then the FED is doing that and they are doing it very well indeed but also sadly everything they are doing is creating so many more problems for everyone.
The People who are struggling will struggle even more just trying to get a job and trying to afford to buy food to eat and while the FED might want to control the prices of food they can’t control prices as much as they might want to it is impossible to do that.
Unless what the FED really wants is to see people starve and struggle but is that fair to say? Perhaps it is because when you continue to make the same mistake over and over again and then people start to suffer and struggle, well then perhaps that kind of criticism is not only deserved but must be mandated.
Which brings up a question that many people have…
IS the FED trying to destroy the economy or are they just so ignorant that they cannot see that continuing to raise interest rates over and over and over again will never bring about a reduction in inflation.
They probably think that there is some kind of magic number that will work out for them but No it will not work and the greatest reason why it will not work is that it is a single dimension answer to a multi-dimensional problem that has failed to work.
They either cannot see it or they are wilfully ignorant of the failed policy.
Some have said that perhaps if the FED were to do something different you know like to not raise interest rates or to perhaps even relax the rate.
Sadly though it appears to many that the FED is blind to all the damage they have have allegedly done and will continue to do that damage all the while believing that this time it will be different you know this time when we raise the rates inflation really will go down…
Yes, just keep on putting those rates up higher and higher… because you believe that it will eventually work right?
What if they go too far…
What if they just keep on raising interest rates until the value of the dollar drops too far and then no one will want to open a business or hire an employee or buy a car or a house.
What happens then?
Nothing happens because then people will not have jobs and they will not have cars and they will not have a home either… Many people may not even have food to eat…
That is what will happen if these people do not come to grips with the reality of this situation and how they cannot stop inflation by making it more expensive for people to live because that is what is happening transference economy does not result in a positive change…
That is what happens when you just keep on making it more expensive …
Interest rates just makes it more difficult for anyone to do anything and if something is not done that is substantially different than what they have tried but failed to do then nothing will be the result and that means that Zero will be the final result.
Zero new jobs.
Zero new homes built.
Zero Cars built because no one can afford to own one and no one can get a loan to buy one.
Zero is what is happening every time they get up and disrupt the economy hoping that something will happen to change the nothing they are doing differently.