Inflation and Economics Politics

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, says the economic recovery needs to be firmly rooted before the central bank reverses course and begins to raise interest rates. This will allow the money supply to inflate to the "correct" levels, with just enough liquidity to refloat the economy. If the Demos were planning to let the economy recover, this would work.

But the Demos plan to tax the daylights out of everyone.

Inflation is the vilest tax. The government prints more money, and the value of the money goes down. Anyone who keeps his wealth in cash, like the poor and the honestly thrifty saver, bears the burden of this type of tax.

Of course Mr Obama announced he was planning havoc on the banks with massive, explicit tax rises, since they dared to take the federal money Mr Obama forced on them. The net effect is low rate for Mr Obama's inflation, but crush the banks.

Ignorance has a price. Will the people fall for Mr Obama's moves?

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Consumer Price Index, Unweighted, not seasonally adjusted, US City Average, Source

All Items: +2.7% since Dec 2008
Less Food and Energy: +1.8% since Dec 2008
Medical Care: +3.4% since Dec 2008

CPI - Weighted, US City Average
All Items: +3.4% since Dec 2008

The invisible inflation tax is made visible. It isn't the grocer who raises your food bill, it isn't the doctor who charges you more, its this government and their invisible tax.