Why Wasn’t the Surge in Inflation on the Fed’s Radar?
Neel Kashkari is the president of the Minneapolis Federal Reserve Bank.
In a new essay, Kashkari wonders why he missed the inflation that is hurting our economy so badly. He says the Fed and others outside made the same errors. “First, being surprised when inflation surged as much as it did and, second, assuming that inflation would fall quickly.”
They missed it because they made the same errors. They missed it because their “tools” didn’t work. They missed it because their “models” were wrong.
Now that’s a real nothing burger for you. They missed it because they missed it.
The financial news website ZeroHedge is simply merciless in its criticism of Kashkari, calling him a real “failer-upper.” We have to agree. He was a Goldman Sachs man who Hank Paulsen brought along with him to Treasury. The story about how Kashkari arrived at the $800 billion Bush bailout of the big banks is a classic. He figured out how to save the economy on his Blackberry. It turned out to be one of the biggest wealth transfers of all time!
ZeroHedge writes that “market participants are used to broadly ignoring the Minneapolis Fed president’s insights into the monetary policy (not only does he not understand it, but he has been wrong about pretty much everything during his relatively brief Fed career) if only to listen to him for perspective on what will not happen.”
A year ago Kashkari thought the Fed funds rate would be 1 percent in 2023. It is actually 4.25—4.5 percent.
We don’t especially fault Kashkari or anyone else for being wrong in their forecasts. “Predictions are hard, especially about the future,” said the great physicist Niels Bohr. But we do fault Kashkari and his fellow Deep State Money Manipulators for screwing around with interest rates, imposing their wild guesses on the economy. In his book about the errors of socialism, Hayek called this the Fatal Conceit. People like Kashkari and the rest of the Fed geniuses don’t know what they don’t know. “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design,” said Hayek.
Interest rates are the price of money, and like other prices, they should be set not by bureaucrats and PhDs, but by real conditions of supply and demand. Otherwise, they create huge distortions in the economy. Milk prices set artificially high by the government lead to warehouses filled with surplus cheese. Prices set too low by the government lead to shortages. That is why Soviet grocery stores were always empty.
And that is why the Fed’s monkeying around with interest rates creates bubbles. And ruins currencies.
It’s about time we put the Fed out of our misery. Don’t be victimized by their mismanagement of our economy and the US dollar. Protect yourself, your family, and your wealth from the likes of Neel Kashkari. Speak with a Republic Monetary Exchange gold and silver specialist today.
Remember, they can’t just print more gold!