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Date Posted: 18:11:03 1/10/23 Tue
Author: Jasper
Subject: Charles Smith writes of a conundrum in Black Swan ideology.

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In the conventional telling, the Fed made a policy mistake in keeping interest rates and quantitative easing (QE) in place for too long, and now it's made a policy mistake in reversing those policies. Huh? So ZIRP/QE was a policy mistake, OK, we get that. But reversing those policy mistakes is also a policy mistake? Then what isn't a policy mistake? Doing nothing? But wait, isn't "doing nothing" maintaining ZIRP/QE or ZIRP/QE Lite?

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What if inflation is being driven by more than wages snapping back from 45 years of suppression imposed by financialization and globalization? What if what's driving inflation isn't wages but the reversal of the gross distortions created by hyper-financialization and hyper-globalization?

Put another way: maybe the Fed isn't as blind to the sources of wages rising (demographics, etc.) as many think. Maybe the Fed sees a strong labor market and rising wages for what they are, good things, not bad things.

https://www.oftwominds.com/blog.html#jump

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