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A few weeks ago I pointed out that the Fed had brought inflation down from 9+% in June of 2022 by reducing the money supply. But by October 2023 - in response to a tanking stock market- those reductions stopped and the money supply began to grow again. The latest figures - released yesterday - indicate that the money supply continues to grow.
The Fed had been trying to lubricate the economy and the market with a growing supply of dollars while keeping inflation tamped down by relatively high interest rates. But now, after cutting interest rates, does this increasing money supply reignite inflation? Milton Friedman tells us that inflation is always a monetary phenomenon. We are going to find out.
Discussion (57)
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Need to inflate the economy for the election- just like we need to keep releasing gasoline from the strategic petroleum reserve until the 1st week of November.
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Monetary velocity also factors into the price equation...what are the trends on that?
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I think FJB already emptied the reserve.
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Only half- he has time to finish the job- or rather Jill does.
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In any case, it's not filled with gasoline. Oil from the reserve still has to be refined, which takes a while.
And our refining capacity isn't what it should be either.
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