Money Reforms India

Trump is going to turn on Kevin Warsh. It is only a matter of time.

Here is why.

Warsh will walk into the Federal Reserve with the same neoclassical training as every chair before him.

That training will tell him to raise interest rates because the models interpret rising prices as too much demand. His PhD advisers will agree. They all learned the same thing.

But the actual problem is that Trump's own war has destroyed a chunk of the world's physical production capacity.

The fertilizer, the helium, the sulphuric acid that comes through the Strait of Hormuz. He had no idea what those inputs actually do inside global manufacturing.

So the war wrecks supply. Prices rise. The Fed raises rates. The economy gets worse.

And then Trump starts screaming about interest rates being too high and blames the person he just put in the job.

We watched this exact cycle play out with the previous Fed chair.

Trump appointed him, attacked him, then forgot he was the one who chose him in the first place.

There is no limit to that kind of forgetfulness. Let's wait and see when this round comes.

For a more comprehensive understanding, refer to the full video presentation given in the comments.

90% of money created since 2000 was created by private banks. Not the government.

And between 1980 and 2000, the government was actually destroying money while monetarists were blaming it for inflation.

In my latest video, I show exactly how private debt acceleration drives asset price booms, how financial equity works like a seesaw that always tilts against the non-bank sector, and why the obsession with cutting government deficits is making all of this worse.

You'll find more details in the comment section.

Slowing demand growth is supposed to let supply catch up and bring prices back to normal.

Sounds tidy. Sounds reasonable.

The problem is the whole framework assumes the textbook model of supply and demand actually describes the economy.

It does not.

Firms do not set prices by clearing a market. They set them by looking at costs, sales, and profit.

Full breakdown in the comments.

With inflation rising to 3.3% today, it's *incredibly frustrating* to see someone who used to set interest rates using their influence to call for *even more* interest rate rises in response to rising prices.

This strategy didn't work during the last energy crisis. It won't work this time. Rate rises are just a recipe for recession.

Our latest blog looks at why interest rates aren't up to the task of tackling inflation, and how they could actually be counterproductive given the current state of the UK economy 👉 https://positivemoney.org/uk/update/when-all-you-have-is-a-hammer/

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