The Fed claims their policy is due to the danger of rising “core inflation.” But this cannot be true. The biggest consumer item, houses and real estate, is tanking.
Consumer Price housing component is rent, not real estate asset price. If it were real estate asset price, we'd have witnessed enormous inflation in the last decade. Rent is currently going up as first-time home buyers are facing tighter lending standards. Pirce for everything, including stocks, are going up . . . that can only mean one thing: we are facing inflaiton danger. The FED doesn't have much of a choice . . . either they raise rates or they make dollar irrelevant through inflation.
American manufacturing base went overseas for a very simple reason: all the government programs and hand-outs are making Americans, both public and private, consuming far more than we produce ourselves. To the extent that social security has destroyed the saving habit in America, the New Deal was the problem, not a solution.
