Missing the Target
Posted by
John King on Fri, Jan 27, 2012 @ 02:08 PM
"Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!" The Red Queen to Alice in “Through the Looking Glass” by Lewis Carroll.
In his press conference this week, our Ben stated that the Fed is considering adding an Inflation Target of up to 4% to its to-do list. He extolled the virtues of this concept in a book he wrote, “Inflation Targeting: Lessons from the International Experience.”,(Princeton University Press, 1999). Despite the fact that such targets have been abject failures in the ECU & U.K. and appear to act like over-confidence builders causing greater risk taking, the helicopter pilot in Chief thinks this would be a great idea to further drain the bank accounts of the citizenry. Leaving interest rates at zero for what seems like an indefinite period hasn’t worked especially if you’re retired and living on your principal. Now he wants to subject you to a competition with him to see if you can keep home & hearth together while he runs up your living costs.