that number has been floated for many, many, many years as the target.
Translation - we need high inflation so that people can never get ahead by saving. “You will own nothing and be happy”
All of us that saved and invested for retirement have been suckers.
It is obvious to anyone who knows anything about psychology, economics and boiling frogs.
People are willing to put up with a little bit of theft if they don’t notice it too much and can’t do anything about it, but they do have a breaking point.
Fiat money as a reserve currency is b.s.
Take it from a red neck who managed not to be brainwashed by the Cornell Econ department (which was reasonably tolerant of diverse view points all things considered).
Tying the currency to a single commodity makes the most sense and silver probably makes less sense than gold (Pax, William Jennings Bryan and Fred Dubois).
Arguably McKinnley was the last Republican with a really good economic platform—although from Harding on, I’m willing to forgive at least Coolidge, Ike, Reagan, and Trump because having to build on the wreckage of the early 20th century amendments (esp. income tax which divorced taxation from representation), Wilson, FDR, and LBJ, esp. after confirmed by Nixon and Ford, is a thankless task.
I’m glad the worst of the silver ‘pubs joined the dems.
They want low rates of inflation to depress debt servicing costs on the national debt. We are now paying $400 billion a year on the $31 trillion national debt. It is expected to rise to a trillion dollars a year by the end of the decade.
Each percent rise of the interest rates that affect the interest paid on US T-bills adds hundreds of billions to debt servicing costs. Government has a vested interest in keeping interest rates artificially low. Inflation must be controlled. And Wall Street sees inflation as a threat as well. With high interest returns on T-bills, people will choose them instead of stocks. Less risky.
The entire global economy has been based on cheap money with low interest rates that are artificially maintained. The dollar is the world’s reserve currency. Higher interest rates on US T-bills sucks money out of the global economy.
How about they shoot for 0% inflation like Eisenhower? I don’t want another tax hike on my income without voting for it.
“The evidence is that steady 4% inflation imposes very small additional costs compared to steady 2% inflation. Either way the economy adapts.”
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They’re testing the water for normalizing high inflation. First 4% per year will be ok, then 8%, then 20.
It’s really simple: Banks hate inflation, but with zero inflation people don’t need banks; they can keep their money in a hole in the ground. So 2% is simply a number that is significantly above zero, but still quite low by paper-money standards. BofA is just covering Biden’s ass now by emphasizing the arbitrariness of the number.
The government has been doing all in its power to cause prices to rise at least 2% each year. This is not the job of the government. It has no right to take actions that cause the currency to lose value.
Inflation is all benefit for the government. The rising numbers fool the folks into thinking that the economy is growing. The government can pay off its debts with less valuable dollars. Rising salaries cause bracket creep and higher taxes. Savings lose their value, punishing anyone who acted prudently and worked to save money so as not to become a burden. Politicians get cost of living raises, and so don’t care.
The same way the Treas. Dept. came up with the $700,000,000,000 bank bail out in 2008....they took SWAG!!!
There is something special about 2%. It’s the amount that people on SS can stand. While SS goes up with inflation, savings and pensions do not. At 2% retired people have an optimal chance of surviving financially. Below 2% and the SS goes bankrupt. Too much over 2% and the retirees do.
The story is correct that its a number that has its victims and beneficiaries. But with 2% they are nearly equally split. The one inflation that hurts the government most is medicare costs. That hurts everyone all the time.
BoA is a joke. How much have they loaned to illegals?
https://www.reuters.com/article/us-bankofamerica-immigrants-idUSN2247507320070222
Just this week I attended a meeting where one of the speakers was a man, from the business side rather than the academic side of economics, who had participated in Fed meetings in the past.
He assured us they had no idea what they were doing.
Maybe the WEF touted 2% at one of their world leader indoctrination gatherings?
The bankers want to return to near-free money, QE & pumping up equities and real estate. bah, we need to return to a reality based cost of goods & services.