Federal Reserve official makes foolish prediction.

Federal Reserve Bank official Thomas Barkin.

In recent months, Federal Reserve officials have made many predictions regarding inflation that have proved to be wildly erroneous (e.g., "inflation is likely transitory"). Well, this trend continues today, when Richmond Federal Reserve president Thomas Barkin stated that inflation was likely "on the back end," implying that, in the USA, the rate of inflation has peaked and is likely to decline in the future. Barkin added that it remained unclear how long it may take the inflation rate to decline to the Fed's 2% target.

In other words, Barkin is apparently unaware that, since 2008, the Federal Reserve Bank has printed trillions of dollars and is likely to print still more because Congress and the Presidency seem oblivious to the inflationary consequences of their fiscal policies. He is apparently also unaware that history teaches us that, once a society becomes addicted to money-printing, such money-printing does not stop until the affected fiat currency becomes worthless.

I shall revisit Barkin's remark a few months from now, when inflation has surged higher or remains persistent.

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Monday, 22 July 2024