One of the hot topics in US monetary policy is whether Washington should follow a “super-loose” approach endorsed by Jay Powell or an “ultra-loose” approach demanded by President Trump.
Under the guise of Fed independence—an obvious fallacy—the two politicians have orchestrated a media charade that fits precisely between the boundaries of the Keynesian establishment’s Overton window.
On one hand, Jay Powell and the members of the Fed are advocating for a full percentage point decline in the Fed Funds Rate within the next 12 months. This will, of course, require the provision of more newly-printed money—also known as inflation—on the back of money supply growth at just under 4 percent over the last 12 months and an astounding annualized rate of 6.2 percent over the last 10 years.
On the other hand, Donald Trump wants precisely the same thing—monetary inflation leading to lower interest rates—but he wants it harder and faster.
Lurking in the background, licking their chops, are members of the rent-seeking class—those who can’t succeed in a free market and must therefore mooch and loot via proximity to taxpayer funds or the Fed’s money printer. These talentless parasites include stockjobbers, hedge funds running arbitrage scams funded by the taxpayer, CEOs of publicly-traded zombie companies, and—of course—members of the real estate investment community. …
Those familiar with Austrian Business Cycle Theory (ABCT) will not be surprised by the preceding. The dynamics of the commercial real estate investment market are only a specific instance of the broader theory’s undeniable observations.
It seems, however, that the threshold of pain for printing large amounts of money to juice the capital markets is getting lower and lower. Monetary and fiscal authorities—including Powell and Trump—no longer have any modesty about their desire for inflation, revving up the money printer at the slightest hint of a downturn in asset prices. We are moving quickly towards an era of aggressively inflationary policy without pretense.
This state of affairs is to the benefit of a few within the moocher-looter class, but most Americans will continue to suffer the consequences. Lacking real savings or a productive foundation, the American culture and economy will continue to backslide into cheap consumerism and high time preference—the opposite of civilization.
The solution? To the extent there is one, it comprises rejecting political messianism and thereby limiting the scope of government action and spending. In that instance, Americans will be required to work out their own salvation, but the same will apply to the Real Estate Roundtable and the rest of the looters.
Naah, the author isn’t radical enough!! Get the state out of the economy, get the Federal Reserve closed down and get the average Joe back in to a low time preference lifestyle. Yes, this would be rough on the moocher-looter class but who gives a damn, they have stolen enough through the Cantillion method of political means. Since they are not operating within the economic means, they deserve every little thing they get!