A very interesting missive from Mr. B.
From Harley Bassman, The Convexity Maven, September 7:
You might recall I recently tangled with a few egg-headed economists and overly educated pundits, so dubbed “Team Transitory”, who confidently posited last year that the ~5% CPI inflation rate of last summer would quickly revert to the FED’s target of ~2% by this past Spring.
Names were called as I was warned “not to step in it”. Against famous grey- beards and erudite young Turks armed with graphs and charts, my only defense was to retort: “Who are you going to believe, me or your lying eyes ?”
Adjacent to Team Transitory is a group of well-educated ne’er do wells who insist that the FED cannot create inflation. Of course, this too is false; a Central Bank can create inflation...if they try hard enough.
Today’s question is whether the FED can reverse what they have created without any more collateral damage.
While the Great Financial Crisis (GFC) was somewhat predictable relative to a few ill-considered Government housing policies, COVID was not. Thus, I must offer a “pass” to the FED’s -lanthanum circle- emergency monetary support....
....MUCH MORE (12 page PDF)
