Higher gasoline prices are only a harbinger.
With extraordinary government spending and extreme budgetary deficits, it is only a matter of time before we see frightful inflation. It may take a year or two to really show up but it will come.
The Federal Reserve’s original primary job was not to protect against systemic financial risk, as is being proposed by the Obama administration. but primarily to maintain the value of the currency. Not so it seems.
Since 1978 the Fed has to help enforce the Full Employment and Balanced Growth Act, also known as Humphrey-Hawkins. That conflicts with the Fed’s prime stated activity. That’s because the Act’s enforcement creates an inflating bias, not one of dollar stability.
So there is always a conflict of interest being overlooked by financial media comment.
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