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September 7, 2022 | Aggressive Fed-Rate Increases: Is Powell Doing A Volcker?
Bob Hoye
After being arbitrarily accommodating, then in a relatively sudden fit of increasing administered rates, is the current Fed Chair, Powell, trying to replicate Chairman Volcker’s “success” in ending inflation in 1980? Perhaps, but since the Fed opened its doors in 1914 the US dollar is only worth, well, 3 cents on the dollar – which is an indelible record of deliberate depreciation – otherwise known as policymaking. And just what drives chronic depreciation? Generations of central bankers pushing the concept that the Fed can prevent recessions, which was understood by the original backers. Recessions followed financial crises and as “lender of last resort”, such crises would be prevented, therefore no recessions. The theory is still appealing, but with 19 recessions, including one Depression, it has never worked.
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Bob Hoye September 7th, 2022
Posted In: Charts and Markets - Bob Hoye