Dr. Jeff on Nostr: An inflationary currency requires an ever-expanding monetary and credit supply for ...
An inflationary currency requires an ever-expanding monetary and credit supply for the underlying economy to survive over the long-term.
Deflationary pressures are the primary adversaries to such a system and, if and when they occur, they must be quickly resolved or removed.
In light of this, the Federal Reserve (and other central banks) attempting ongoing quantitative tightening in an inflationary system is akin to driving 70 mph down the highway and shifting the car into reverse.
The engine will eventually reject this paradox...
And quantitative easing will be forcibly resumed.
Deflationary pressures are the primary adversaries to such a system and, if and when they occur, they must be quickly resolved or removed.
In light of this, the Federal Reserve (and other central banks) attempting ongoing quantitative tightening in an inflationary system is akin to driving 70 mph down the highway and shifting the car into reverse.
The engine will eventually reject this paradox...
And quantitative easing will be forcibly resumed.