How stupid is the Fed? How stupid is the media for not figuring out how stupid is the Fed?
It’s not rocket science. They’re fucking us with their “monetary policies.”
It’s so simple a 12-year-old could understand it: The Fed doesn’t want to raise interest rates because it fears inflation. But they also tell us the main source of inflation is the rising price of oil; most other prices are relatively stable, or are only rising because of the oil component. Still, they keep the interest rate low. That devalues the currency on world markets, as they’re flooded with cheap dollar bills. That makes investors move into other areas, namely commodities, namely oil. Which just makes the one inflationary component that’s sinking the U.S. economy rise more. If the Feds would raise the discount rate, oil would become less attractive to speculators—hem, excuse me, investors, and while some inflation might rise somewhat, the number one crippling source of inflation, oil, would fall. The inflation that rises would be more than offset by the fall of oil.
Europe meanwhile keeps a strong currency. Excluding oil, their inflation is higher, and has to be reckoned with to some extent. But they have not experienced anything near the price shocks over the last two years that the U.S. has.