Love Affair With Inflationary Policies
To End in Disaster
"Two lovers, of the notion that inflation can cure everything that ails an economy, recently squared off in a battle over who adores counterfeiting the most. Paul Krugman, who probably has a statue of Al Capone at his bedside, chided Ben Bernanke in a New York Times Magazine article for his unwillingness to raise the Fed’s inflation target in order to reduce the unemployment rate .. I have to ask our dear Fed Chairman and Nobel Prize winner, where is the evidence that inflation causes people to find work? In reality, it’s the exact opposite that occurs. Inflation robs the middle class of their purchasing power and sends them onto the government dole .. If Krugman and Bernanke were correct in believing inflation has a positive influence on the workforce, Zimbabwe and Argentina would both be paragons of how to achieve full employment .. the ECB, BOJ and Fed continue to believe a positive rate of inflation must be maintained at all costs. If they persist with this misguided policy, this will end in disaster."
- Michael Pento (AE)