by Karl Denninger
Market-Ticker.org
Powell once again jawboned Monday, stating that “he knows” inflation is “much too high” and that The Fed “will” act as required to stop it.
First comes the jawbone. Then, if it doesn’t work (and it won’t in this case) comes the action.
Why won’t it? Because the problem isn’t The Fed, per-se. It never is. It’s Congress, who thinks that spending money they don’t have is reasonable. While it can be in the short term for either a family, a business or a nation, in the long term it ruins all three.
Always.
But we, as Americans, have attention spans and remembrance of history that approximate the length of time a pixel stays illuminated on a smartphone screen. This apparent lack of attention seems to extend to all manner of policy decisions, including what’s going on over in Ukraine right now, specifically why Russia reasonably believes the threat to their nation and its political system (and maybe their society) is existential. Yes, I said reasonably believes; any madman can conjure up a boogie man in the closet, but this is real and informed by historical events — it is thus entirely reasonable.