Heresy Financial
May 24, 2023
If the Federal Reserve has proven anything over the last 18 months, the inflation genie is hard to put back in the bottle. The Fed has been reducing the size of its balance sheet, and they’ve been raising interest rates consistently. Yet inflation is still sticking around. Now, many people blame this on the triple ends of new dollars that were printed in 2020 and 2021.
People also blame the years of zero interest rate policy that stuck around too long, leading to excessive risk and debt buildup. But the effect that high-interest rates are now having on the economy may be far more damaging in the long run. In fact, keeping rates too high for too long could end capitalism as we know it and replace it with something far worse.
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