The Fed: Inflation is Good (who asked what's good for you, anyway?)

This particular sentence caught my eye in an article on Bloomberg today, "U.S. Economy: Consumer Prices, Industrial Production Tumble":

‘Unhealthy’ Levels

Fed Bank of San Francisco President Janet Yellen warned yesterday it’s “not acceptable” for policy makers to allow inflation to fall “to levels that are unhealthy.”

This is one of those unguarded comments by a (relatively) minor PTB that reveal just how the game is played.

We've all been taught that inflation is bad, and it is: it eats away at your earning power and enfeebles your savings.

But what's this? A Fed regional president telling us (well, actually, just those who read Bloomberg, not us) that inflation is actually a good thing, and must be preserved. Why?

Well, inflation is actually a godsend for big business and banks. The money they borrow now, will, with the magic of inflation, be repaid with cheaper dollars in the future, making them a tidy profit.

In fact, inflation is the foundation of our current monetary scheme; without it, the Federal gov't couldn't indebt itself to such extraordinary levels without going bankrupt, as the debt itself depreciates due to inflation, magically shrinking as it grows.

So, in an unguarded moment, a Fed regional president spoke the truth. They need inflation to keep their scheme working. It makes them money, while bleeding us dry. Nice set-up.

This is worse.....and we are currently in it........


en.wikipedia.org...(economics)#Deflationary_spiral

I stole the following......

"Deflation is not good for anybody, in the final days.

Follow the path:
1. Frozen credit leads to minimized borrowing.
2. Minimum loans leads to NO BUYING on time.
3. No buyers leads to production stoppage.
4. Lower production causes layoffs.
5. Laid-offs curtail expenditures.
6. Curtailed spending affects other segments.
7. Other segments minimize production.
8. Cycle 1 thru 7.
9. The point is reached where minimum goods and services are available at the lowest price point.
10. Shortages of everthing appear.
11. Prices rise, and only a segment of the population can afford them.
12. Deprivation begins....followed by insurrection.
13. Take a guess on what happens next...."


[edit on 16-1-2009 by Pinktip]

reply to post by Pinktip


Yes, but you can't shore that up by devaluing the dollar. If we do that then you should expect capital flight which will send us into a tailspin of inflation. Add to that massive unemployment, and a huge wage disparity and all you'll get is worthless dollars in the end. What is happening right now is the cure to the Fed disease, not the disease itself. Inflation WILL KILL US in the end.