Why Consumer Price Inflation is Here to Stay

from Zero Hedge

Authored by MN Gordon via EconomicPrism.com,

Jerome Powell might be done as a useful Federal Reserve Chairman. Not that Fed Chairs provide a use that’s of any real value. They mainly excel at destroying the wealth of wage earners and savers for the benefit of member banks.

But as Powell loses a grip on price inflation the business of supplying credit at a fixed rate of return becomes less fruitful. Consumer price inflation, as measured by the consumer price index (CPI), is rising at an annual rate of 4.2 percent. That’s well above interest rate of a 30 year fixed mortgage, which is currently 3.1 percent.

It doesn’t take much imagination to foresee a CPI over 6 percent. At that rate of price inflation, what good to the bank is a home loan that’s only paying 3 percent? This, among other reasons, is why Jay Powell is toast.

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