On February 20, 2004 Ben Bernanke gave one of the most remarkable speeches of his lengthy Fed career; he served at the Fed from 2002-2005 and 2006-2014. He claimed "improvements in monetary policy, though certainly not the only factor, have probably been an important source of the Great Moderation." (1) The Great Moderation was a term economists and central bankers came up with to e
In last week's article, the hierarchy of economic prices was discussed. (1) There it was described that in an economy ravaged by a monetary inflation, wealth would best be preserved by owning assets. On the other hand, people whose wealth was measured in goods and wages would fare much worse. A simple equation was introduced which summarized this result;
In last week's article, (1), Frederick Bastiat's insight into how inflation - what Bastiat called 'false money' - contributes to the concentration of wealth was discussed.
In last week's article Charles Holt Carroll's adage of inflation being "the surest way to fertilize the rich man's field with the sweat of the poor man's brow" was discussed.
"Inflation is the surest way to fertilize the rich man's field with the sweat of the poor man's brow."
Charles Holt Carroll (also attributed to Daniel Webster)
"The Fed doesn't have any direct responsibility for these issues (wealth inequality) but nonetheless they are important." Jerome Powell, March 2020