The difference between what economists believe and what’s true is Pacific Ocean vast. Think the popular view that the Federal Reserve, by paying banks to park reserves at the central bank, is containing inflation. Where to begin?
First, inflation is one thing and one thing only: a shrinkage of the exchange medium circulating such that it exchanges for fewer and fewer market goods. In our case, inflation is a shrinkage of the dollar. Except that the dollar’s exchange value isn’t, nor has it ever been, part of the Fed’s policy portfolio.
Read the full article on Forbes.
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John Tamny is Founder and President of the Parkview Institute, editor of RealClearMarkets, senior fellow at the Market Institute, and Senior Economic Adviser to mutual fund firm Applied Finance Group. Tamny is the author of eight books. His latest is The Deficit Delusion: Why Everything Left, Right and Supply-Side Tell You About the National Debt Is Wrong. His others are Bringing Adam Smith Into the American Home: A Case Against Home Ownership, The Money Confusion, When Politicians Panicked: The New Coronavirus, Expert Opinion, and a Tragic Lapse of Reason, Popular Economics, Who Needs the Fed?, The End of Work, and They're Both Wrong: A Policy Guide for America's Frustrated Independent Thinkers.
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