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Raising Interest Rates and the Return of Hyperinflation

by Jason Simpkins, Outsider Club:

The Federal Reserve Bank of St. Louis published an interesting paper this week.

It used a lot of technical phrases like “monetary base” and “velocity” (which I’ll be happy to explain), but the point was pretty simple…

Fed policy, the paper argues, has failed. It’s restrained growth, rather than accelerate it. And worse, it’s multiplied the money supply while simultaneously forcing that newly-created cash to the sidelines, where it’s being “hoarded.”

That, in turn, has kept headline inflation rates subdued.

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2 comments to Raising Interest Rates and the Return of Hyperinflation

  • Ed_B

    “Fed policy, the paper argues, has failed. It’s restrained growth, rather than accelerate it.”

    It is interesting that this is EXACTLY the same thing that happened in the 1930s when the US Gov and Fed tried to “fix” the problems that caused The Great Depression. They spent a HUGE amount of money, didn’t fix the problems, actually made them worse, and then several YEARS later declared victory over these problems. Idiots.

    Most of these problems are CAUSED by those running the big NY banks. It is a planned event and is designed to fleece American citizens of their hard-earned wealth. If not done to often, it goes largely unnoticed and is frequently blamed on the myth of “the business cycle”. There is no business cycle. There are only immensely wealthy and financially powerful people pushing the buttons and pulling the levers that make things happen. ALL things, not just the good ones but the bad ones too. More people need to recognize this organized fleecing for exactly what it is.

    So, what can be do about it? Well, one thing we can do is get ourselves independent of the financial system. We do that by minimizing the amount of fiat currency we hold. We only need enough fiat to pay our monthly bills plus have some emergency cash in reserve. The rest of our money should be in gold and silver held outside the banking system or other things of real tangible value and not mere scraps of paper with ink on them. After that, eliminate your debt. Do not borrow money unless it is for something VERY important, such as a home, and then keep it reasonable. Do not let real estate sales people tell you what you can afford because they will always set this number to the max, which does not allow for any financial problems or setbacks in your life… and there WILL be some. Do not use credit cards unless you pay off the charges each and every month. Credit is not money, although a lot of people think that it is. Follow these simple rules and the brunt of the problems created via a financial collapse will not fall upon you. But they WILL fall upon those who do not follow these guidelines.

  • Dan C

    Ed_B,

    You got it right!

    The banks expand their lending with money created out of thin air, then when the bankers decide the time is right, they crash the system.

    Then people don’t have the money to pay the loans back and the banks take the people’s assets.

    It is sophisticated thievery.

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