Updated 2 years ago
I know this is just two data points on a graph I threw together haphazardly, but still.
Going by this comparison, ceteris paribus, if history is any judge, interest rates are wayyyyyy too low to beat back inflation. 2-2.5% is a joke. Let it all burn LOL (throw in New York real estate while we’re at it)
Yes it’s a global problem, but it was also global in the 70s (there were many factors… remember the gas crisis in the early 70s?).
We need a more decisive fed. We went through the entire 60s-70s with LBJ, Nixon, “Whip Inflation Now” Ford and Carter kicking the can for short-term political gains before Paul Volcker had enough backbone to throw out the cocaine, ludes, and disco shoes (aggressively raised rates), to everyone’s benefit. But it still caused a deep recession, but however else you think about him, Reagan isn’t remembered for that.
Biden had the same opportunity but he and his Fed choice have chosen short-term relief over long-term recovery. Kicking the can. Something Boomers do out of habit.
A global recession – something we haven’t seen in 14 years – is going to be the only way to cure this. We will have to buckle down and get through it, and remember the value of a dollar.
Bring it on. The Native Americans always said the best medicine tastes bad.
Thanks for coming to my TED talk.
Update: Possibly spoke too soon. It’s possible that 2022 is different from 1979: that the economy is more global now, while simultaneously being much quicker to respond to rates.
