'The Fed’s most pressing concerns are to not only reverse its monetary excess and misjudgment of inflation, but also to instill confidence that they will follow important provisions of the Federal Reserve Acts .. Now, like in the early 1970s, the Fed alone must unwind a combined monetary/fiscal policy failure. Thus, once again the architects of the Fed Acts showed their wisdom when they tried to establish the Fed’s independence, an insight apparently lost by today’s practitioners .. Reversing the massive deposit growth of 2020/21 will add to the list of policy failures..''Remarkably, Fed's low rate policy was very slow to change even though the actual increase in their preferred inflation measure surged to more than triple the upper limit of their target. Thus, the Fed continued to create demand, i.e., to shift the Aggregate Demand curve outward, while doing nothing to lift the Aggregate Supply (AS) curve upward..
This situation has essentially morphed into a cost-of-living crisis. Real income for full time hourly and salaried workers has dropped by the fastest pace since 1980..
The Fed’s most pressing concerns are to not only reverse its monetary excess and misjudgment of inflation, but also to instill confidence that they will follow important provisions of the Federal Reserve Acts..
Now, like in the early 1970s, the Fed alone must unwind a combined monetary/fiscal policy failure. Thus, once again the architects of the Fed Acts showed their wisdom when they tried to establish the Fed’s independence, an insight apparently lost by today’s practitioners.
..
As the 2020/21 episode demonstrates, the poor results of the Fed’s stewardship have continued. Ostensibly, this is confirmed by the Fed’s absolute refusal to allow for audits of monetary policy operations. Ironically, the argument is that this would impinge on their independence, which they surrendered in the Pandemic for two long years.
Reversing the massive deposit growth of 2020/21 will add to the list of policy failures because of the largely unprecedented degree to which deposits grew in these years..'
- Dr. Hunt,
Quarterly Review and Outlook Second Quarter 2022, July 13, 2022
Context (Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'(Disaster)(Fed, ECB way behind the curve) - 'US Inflation Quickens to 9.1% .. relentless price pressures..' - 'Inflation at current levels is a severe economic, social, and political problem..'(Global Stagflation) - '..price growth that is continuing to outstrip expectations..'(Banking Reform) - 'Disaster is a strong but appropriate word that applies perfectly to the state of U.S. monetary policy..' - Dr. Hunt(Global Stagflation) - 'Spanish Inflation Soars to 10%..' - '..the root cause of the Fed’s policy errors and long record of failed forecasts..'(Global Stagflation) - '..the Fed continues to misjudge inflation..' - Markets and households lose faith that Fed can handle inflation(Banking Reform) - 'The nineties ushered in unfettered Credit in a scope never previously experienced.'