Friday, March 17, 2017

Inflation targeting

We have consumer prices  in red, taken in real time. Then we have the implicit inflation in blue, which is computed after the real GDP growth has been determined.  If the Fed is doing good inflation targeting, then the red line should be a wiggly version of the blue, and it tends to do that.

But, notice that when we near our appointed recession, the two diverge.  The Fed does not seem to be working   The divergence happens when government is out of imbalance as we see the divergences coincide with regime changes in the Swamp.  This tells me that the inflation of government goods is ignored, thus guaranteeing that the Swamp will cause regular recession.  It also tells me thay thr Fed is deliberately letting government slide on pricing, hence the regular recessions.

Whose fault? Our vote is causing recessions.

No comments: