via discernreport:
The Biden regime won’t admit it and neither will most Democrats because it would only add to their reputation of being unable to run a successful economy, but it’s pretty much official now: Inflation is out of control despite the fact that the Federal Reserve has been hiking rates to reverse price spikes.
Thanks to Democrat over-spending during the pandemic when the supply chain was busted and goods were in short supply, prices skyrocketed to reflect the lack of availability, and they’ve not come down very much at all.
Worse, other monetary assets are now being negatively affected as well.
“We saw a big selloff in the gold market last week and the price dropped below $2,000 an ounce. The catalyst for that selloff was tough talk from several Federal Reserve officials and an increasing expectation that the central bank will raise rates again in June,” SchiffGold.com noted this week.
“As Peter Schiff explained in his podcast, everybody thinks the Fed is going to win the inflation fight because it is going to be even tougher. In reality, they are talking tougher because they are losing the fight,” the site noted further.
In a statement on Thursday, Lorie Logan, the President of the Dallas Fed, expressed her concerns about “much too high” inflation, stating that it is not slowing down quickly enough to enable the Federal Reserve to consider pausing its campaign of interest rate hikes in June.
Since 2000, Social Security benefits have lost 36% of their buying power, per CNBC.
To be able to live as well on Social Security benefits as beneficiaries did in 2000, today's retirees would need an extra $516.70 per month.
— unusual_whales (@unusual_whales) May 24, 2023
Central Bankers, Economists Failed to Predict Soaring Inflation: Former Fed Chair Bernanke
Central bankers and most economists failed to anticipate the sharp increase in inflation that began in 2021, and public policymakers were slow to respond after insisting that price pressures were “temporary,” a new paper co-authored by former Federal Reserve Chair Ben Bernanke states.
The Fed misjudged the economic effects of pandemic-era fiscal programs, which explains why many failed to accurately forecast the inflation that resulted from the stimulus and relief measures, including the March 2020 $2.2 trillion CARES Act, the December 2020 package that consisted of $900 billion in COVID-related spending, and the March 2021 $1.9 trillion American Rescue Plan.
The CARES Act, signed by former President Donald Trump, was sufficient enough to strengthen businesses’ and households’ balance sheets and support their ability to spend in the future, the paper claims.
“Overall, as a share of GDP, the headline costs of these three COVID-era fiscal packages were about 4-1/2 times the size of the American Recovery and Reinvestment Act (ARRA), enacted in response to the 2008 financial crisis and the ensuing recession,” Bernanke and economist Olivier Blanchard wrote in the academic paper, titled “What Caused the U.S. Pandemic-Era Inflation?”
However, looking back at the coronavirus pandemic, Bernanke and Blanchard asserted that the inflation bursts were driven by several shocks, such as the dramatic rise in commodity prices, demand shifts (from services to goods), and labor tightness.
But while the economists concede that wage growth had little effect on inflation in early 2021, the paper purports that labor costs increased over time and have become more entrenched in current inflationary pressures.
“The effects of tight labor markets have begun to cumulate,” the paper noted, adding that they will likely “grow and will not subside on its own.”
“The portion of inflation which traces its origin to overheating of labor markets can only be reversed by policy actions that bring labor demand and supply into better balance,” they wrote.
As a result, the Fed has more work to do to curb inflation.