The Federal Reserve took a long, hard look at the raging inflation that America is suffering from — the highest since 2008 — and took decisive action.
It did nothing.
On Wednesday, the Fed held the federal funds rate — the amount of interest commercial banks charge each other for overnight loans — at the same historic low: zero to one-quarter of a percent. The rate hasn’t budged since March 2020.
What this means is that money will continue to be very cheap to borrow, spurring on an already overheated economy with key inflation indicators — such as the “all items index” — exploding to levels not seen since 1992.
Fed Chair Powell’s Message Is Direct Opposite of Reality
Do you think Cubans are fighting for healthcare or freedom from Communism?
The Fed’s Chairman Jerome Powell said on Wednesday, “The Fed’s policy actions have been guided by our mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote the stability of the financial system.”
— Federal Reserve (@federalreserve) June 16, 2021
However, this inaction is having the opposite effect. By keeping the cost to borrow money at or near zero, there is an immense incentive to flood the economy with cheap money.
And with the Bureau of Labor Statistics reporting last week that the consumer price index clocked in at a whopping 5.0 percent inflation rate for the year — the highest since 2008 — cheap money is exactly the opposite of what is needed.
As for the Fed’s intention to “promote maximum unemployment,” the BLS reported that 9.3 million jobs were created in April, which, coincidentally enough, matched the May unemployment number of 9.3 million.
Essentially, one job has been created for every unemployed person, but due to the Pandemic Unemployment Compensation program, people are disincentivized to take these jobs.
With the $300 weekly unemployment bonus, they essentially are being paid not to work.
The Fed is keeping the rates low to spur businesses to create new jobs, but there are already enough jobs for every able-bodied American.
Biden Cuts Minimum Wage Increase, Slashes Americans’ Retirement
Aside from any market increases or contributions, the average retirement balance is already worth 5 percent less than this time last year, and the Fed’s inaction will only spur inflation to greater heights.
And when Congress finally does increase the minimum wage, the raise that poorer workers were expecting will be worth less. A simple calculation shows that the $7.25 minimum wage had the buying power of $7.61 a year ago.
Biden’s Hands-Off Approach Compared to Trump’s
President Joe Biden has personally said very little about inflation aside from trotting out Treasury Secretary Janet Yellen who is “monitoring” the situation, Reuters reported.
“We’re monitoring inflation very carefully and take it very seriously. No one wants to return to the bad high inflation days of the ’70s,” Yellen said.
Contrast that with former President Donald Trump’s engagement with the Fed. Agree or disagree with Trump’s economic policies, he was scathing in his critique of the Fed. He gave voice to American’s frustration with the economy and ensured the Fed heard it.
The Federal Reserve historically has set an acceptable inflation target at 2 percent — a mark it has met for more than a decade prior to the Biden administration.
But, the Fed’s inaction today will only spur inflation to greater heights.
Inflation Reaches Dizzying Heights
In addition to the CPI’s inflation rate of 5.0 percent, even more troubling than the consumer price index is the soaring “all items index,” which the BLS noted is climbing faster than at any time since 1992.
Some of the frightening year-over-year price increases include:
- The energy index rose 28.5 percent, with gasoline a shocking 56.2 percent higher — roughly a dollar more a gallon at the pump.
- Used car prices were 29.7 percent higher. The average price paid for a car in 2020 was $20,292 — today, it is $26,363.
- Natural gas increased 13.5 percent, and electricity saw a 4.2 percent increase.
- Food and housing were both up 2.2 percent, and clothing was 5.6 percent higher.
Yellen says she doesn’t want to return to the bad high inflation days of the ’70s, but the Fed’s inaction is doing exactly that. One thing is for certain: My sideburns are far too short.
This article appeared originally on The Western Journal.
Off-Duty Firefighter Jumped by Mob Who Tell Him It's 'Fight Night' Before Brutal Beating
Asking for a little old-fashioned respect can be the prelude to a beatdown in Mayor Bill de Blasio’s New York City. The New York Post has released video of a Friday night incident in which a rabid mob of teenagers surrounded and then attacked an off-duty firefighter as he walked his dog near his home in the borough of Queens. Republican mayoral candidate Curtis Sliwa, who founded the civic protection group the Guardian Angels in 1979, posted the video to Twitter. Warning: The following video contains graphic images and language that some readers will find disturbing. Last night in Middle Village a mob of kids attacked a man who asked them to stop blasting fireworks. #NYPD from the 104th precinct were there but did nothing. The community reached out to #NYC Mayoral candidate #CurtisSliwa & the #GuardianAngels to find these vicious teens pic.twitter.com/uVJkBUJ0L1 — Curtis Sliwa for NYC Mayor (@CurtisSliwa) July 24, 2021 The 44-year-old victim, whose name was not released by the Post, said he is among those who have objected to the deterioration of his community, and taken the dangerous stand of telling teenagers to behave as if rules really mattered. Retribution for preaching civility arrived Friday night. “There were at least 100 kids … I was walking my dog. They just picked me out and approached me,” the firefighter told the Post in a Saturday interview. “One kid took his shirt off and said, ‘it’s fight night!’ He said he was 19 and said, ‘I could fight you.’ Everyone took their cell phones out. There were cell phones everywhere,” the victim said. “They all came at me…A kid came up behind me and hit me in the back of the head with a bottle and I let go of the dog,” he said. With the dog barking…
Olympic Cyclist Celebrates Victory as She Crosses the Finish Line, Then Learns a Gold Medal Isn't Coming
Neither the gold medal winner nor the woman who celebrated when she thought she had won could quite believe the results of the women’s Olympic bicycle road race on Sunday. Dutch rider Annemiek van Vleuten put on a massive gold medal-worthy display of victory as she crossed the finish line. But there was one catch. Anna Keisenhofer of Austria had been so far ahead of the rest of the pack that two minutes before van Vleuten had celebrated her finish, Keisenhofer had already had won the race, according to Cycling News. Van Vleuten waved her arms in triumph and embraced members of her team, only to learn the truth after someone knowing the facts poured cold water on the celebration. Olympics: Van Vleuten celebrates but mistakes silver for goldhttps://t.co/2twUgBGbht #Tokyo2020 pic.twitter.com/fV1qpmtfiw — Cyclingnews.com (@Cyclingnewsfeed) July 25, 2021 “I didn’t know. I was wrong. I didn’t know,” she said. “This is an example (of what happens) if you ride an important race like this without communication. All World Tour races have communication, and now it’s the three of us standing here and wondering who has actually won,” van Vleuten said, referring to teammates Marianne Vos and Anna van der Breggen, according to CNN. In most races, cyclists are in radio communication with their teams, but that is not allowed in the Olympics. “I’m gutted about that, of course,” she said. Although the realization that she had not won a gold medal hurt, van Vleuten said winning a silver medal remained an achievement. “I’m really proud of the medal, because I did not have an Olympic medal. It’s also a silver medal with a shine on it, because I felt super good today,” said van Vleuten. “My goal was to be at my best-ever level here, and I think I nailed that. It’s…
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