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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