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Showing posts with label consumer prices. Show all posts
Showing posts with label consumer prices. Show all posts

Friday, March 24, 2023

Biden administration causes the problems they claim to be trying to solve

 


The charade continues.  As usual, Sundance at Conservative Treehouse sums it up so even non-financial wonks can follow:

At a certain point in the economics of the great pretending cycle, one must wonder what circles they live in.

Fed Chair Jerome Powell announced another quarter-point interest rate hike and simultaneously noted the banking crisis will likely lead to tighter credit and borrowing for businesses on Main Street…. thereby further reducing the U.S. economic output.  Yet here we are again, and not a single economic or financial pundit is even talking about the origin of the inflation the Fed action is pretending to address, the spike in energy prices.

At the core of the Biden policy issue that creates inflation, is the energy policy that has driven oil, gas, home heating, electricity and manufacturing/farming costs through the roof.  The blocking of energy resource development/production is the top issue leading to massive increases in consumer prices overall.  The Biden energy policy is entirely ignored by a federal reserve attempting to shrink inflation.

Follow the bouncing ball of consequence.

Biden restricts energy development [Main St Suffers].  Prices skyrocket [Main St Suffers]. The fed raises interest rates in an effort to reduce the economic activity to meet the lowered production of energy resource development [Main St Suffers].  The result of the interest rate hike creates liquidity issues for banks holding treasury securities [Main St Suffers].  The banks then reduce credit lines, reduce lending and tighten borrowing to match their lowered liquidity [Main St Suffers].

The Fed then notes further increases in rates may pause as they await the outcome of restricted banking credit and lending from the rate hikes previously installed.  Nowhere in any of this is anyone talking about the nucleus of the issue – the stupid energy policy.  The great pretending continues in the West, while smiling panda lunches with Vladimir Putin. . . .

Read the rest here.

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