It’s A Nightmare: How the Federal Reserve Sparked Inflation, Created Stagflation and A Recession — 5 Things You Should Know About Inflation and How to Stop It

Craig HueyCurrent Events, Economics, Government, Politics2 Comments

The inflation you are seeing is caused by massive government overspending and the historic money creation spike by the Federal Reserve.

The Federal Reserve is America’s independent Central Bank.

Here are 5 things that you should know about inflation and how to stop it:

  1. The Federal Reserve has been keeping interest rates artificially low

By keeping interest rates “artificially” low (below market rates), the Fed has caused a “false economic boom,” overvaluing the stock market and the economy.

As it stands now, the market has already lost more than $7 trillion in value ($1.5 trillion of that value is from retirement accounts alone), and we’re seeing the highest inflation rate in over 40 years.

As Nobel Prize-winning economist Milton Friedman often pointed out, “Excessive government control, regulation, and taxation distorted incentives and put money in the hands of politicians and bureaucrats who had not earned it and suffered no consequences if their policies failed.”

  1. The Fed is driving up inflation

Since its inception in 1913, the Federal Reserve has been printing money and devaluing the dollar. Since 1913, the U.S. dollar has lost over 95 percent of its value.

A nickel in 1913 bought more than a dollar today. Five cents then would equal about $1.50 today.

A dollar in 1913 is equal to about $30 dollars today.

Coupled with the Biden Administration’s bad economic policies of regulations and overspending, the Fed has been making inflation worse by flooding the economy with money (or what they call “quantitative easing”). The Fed has been keeping interest rates at around zero for over a decade.

More money chasing fewer goods not only creates inflation but raises the price of everything we buy because the dollar’s value is worth less.

Inflation is essentially an extra “tax” on the poor and middle class.

The great Austrian economist Ludwig von Mises stated, “Crashes and recessions are made inevitable by monetary stimulus.”

  1. Excess money sparks misallocations of resources and spikes inflation

The Fed’s “qualitative easing” policy of propping up the economy and the market with an endless supply of cash creates a security blanket effect on investors.

This investor “security blanket” creates demand for investment opportunities, which creates bigger profits for investors, which makes the stock market go up. It also creates a need for more jobs and better wages — growth based on a seemingly “stimulated” economy.

This overvaluation leads investors into a false sense of security.

This investor “security” usually ends badly, as inflation continues to grow, and a massive correction in the market occurs, leading to an inevitable crash.

We have an economy that’s artificially stimulated.

Built on a house of cards…

And ready to collapse.

This “artificial stimulus” fools investors, entrepreneurs and companies into believing that the economy is growing naturally, and that the economy is strong.

As the great economist Milton Friedman said, “Everything comes with a price. There’s no such thing as a free lunch.”

  1. The making of a recession or depression: money manipulation

    Virtually every financial crisis over the past 109 years, such as the stagflation of the Carter presidency in the 1970s, or the economic meltdown of 2008, can be linked to the Federal Reserve’s disastrous monetary policies, their endless printing of cash, the expansion of credit, and their “artificial stimuluses.”

Even the Great Depression, as Nobel Prize-winning economist Milton Friedman pointed out, was “… not a failure of an out-of-control free market, but an out-of-control Federal Reserve.”

President Franklin Roosevelt and the Fed had no confidence in the free market to let it sort itself out. They instead relied on their own human judgements and limitations to steer the economy back on track…

These counterproductive coercive policies used to fix the complexities of our economy made the Depression worse, dragging it on and on for almost a decade longer than it should have lasted.

As inflation rises because the Fed keeps printing money, the Fed is forced to reverse their policies, as inflation rises and rises. They slow down the printing presses, raise interest rates, and restrict the flow of money to banks.

Less money to banks means less money to lend, which means less money is available for investors to borrow.

Rising interest rates also dissuade investors form borrowing, slowing investment in new projects, expansion, and new businesses even further.

These once promising investments (that were based on the Fed’s qualitative easing) are now looked on by investors as “malinvestments” which will lead to more economic loss.

  1. The results — A disastrous history

The Fed’s policies to lower inflation have a track record of disastrous results.

Without investment capital, companies that produce products and services shrink. Investors pull back, and stock prices drop. This causes the economy to spiral downward into a recession as the country’s total output of goods and services (or GDP) slows to a point of little to no growth.

With low GDP and continued spending by the government (helped by the Fed’s endless printing press), the dollar’s value shrinks even further, along with the economy, leading to “shrinkflation,” where companies charge the same prices, or more, for less of the product or service.

As things get worse, companies start to lay off workers. The unemployment rate rises. Companies file for bankruptcy — and we’re in a full-blown recession.

However, as inflation rises along with interest rates, what was a bad recession can quickly turn into a depression, unless the government stops its spending and creates policies favorable for companies to grow.

The history of the Fed is failure.

The trust we should have in today’s Fed… None.

The Fed knowing what to do — It’s impossible, they don’t.

The Fed will not solve our growing economic crisis. It will compound it.

Be prepared for worse things yet to come.

And all this nightmare economic chaos confirms what I’ve said for over 40 years.

It’s time to abolish the Fed.

What do you think? Email me at craig@electionforum.org

2 Comments on “It’s A Nightmare: How the Federal Reserve Sparked Inflation, Created Stagflation and A Recession — 5 Things You Should Know About Inflation and How to Stop It”

  1. I have been believing this all along. But can’t stop it. And I sure didn’t vote for Biden. He loves to spend money. I always said I’d like to put Him on My budget.

  2. Everyone should jump on board and volunteer to gather signatures for Convention of States. It uses Artile V of the US Constitution to clean up our Government. We are almost to 20 states that are on board. 4 since just the beginning of this year. The momentum has increased so much. Signing petitions to get this Convention of States going has been in the making since at least 10 years ago, AND we have had 4 states sign since January! Amazing. We need to make it to 34 states. We are more than half way there. Go to Convention of States.com and sign the petition and just continually email or call or both in to your states legislatures. Be persistent. We will get there. We need to abolish Department of Education, put term limits on Congress, abolish Department of Agriculture and so much more. Get involved! Don’t Give Up. We The People Must Stand and Stand Firm We Must. Just look at all the victories in the courts and with education and with so many other things. Easy to find the miserable anxiety stuff out there, hard to find the Major Victories God has done in the last 2 almost 3 years, even longer. Push On People. and may God Bless The USA!

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