In the spring of 2021, the Fed was still insisting spiking inflation was “transitory.” Fast forward one year. Inflation is as hot as ever. Fed Chair Jerome Powell was forced to abandon the transitory narrative last fall. In April, the CPI was up 8.3% on an annual basis. Today, Powell admits the Fed was wrong, but claims everybody else made the same mistake.
Well, not everybody, as the following clips prove.
Now the Fed has a new narrative. It can raise interest rates and shrink its balance sheet to fight inflation without spinning us into a recession because the economy is strong. Schiff says the Fed is overestimating the strength of the economy just like it underestimated inflation.
March 25, 2021 – “It’s going to get much worse. You have to remember that inflation really is nothing more than a tax. When the government spends money, they need to get the money. The public has to pay for it. Normally, the government would raise taxes, and then taxpayers send money to the government and the government spends it. But we just passed a $1.9 trillion stimulus bill. Nobody’s taxes got raised. But we don’t get all this government for free. What happens is the Federal Reserve prints the money and then the government spends it into circulation. But when that happens, the value of all the money that’s already out there goes down. And now the price of everything that you want to buy goes up. And that added price is basically the inflation tax.”
May 12, 2021 – “They talk a lot about the shortage of goods. The real problem is the surplus of money. Whenever you print a lot of money, it’s always a goods shortage because the Federal Reserve can print all the money it wants. But they don’t print products to buy with the money. So, we have all this money being printed. We’re not producing a lot. People are sitting at home cashing unemployment checks. This is a tax. It is an inflation tax.”
May 12, 2021 – “When Joe Biden says, ‘Don’t worry, only people that make over $400,000 a year are going to have to pay higher taxes to fund all these programs,’ he’s lying. Because every American is going to pay the inflation tax. And it’s going to hit the middle class and the poor the hardest.”
June 15, 2021 – “I think the back half of the year is going to be a lot worse than the first half because businesses have been somewhat reluctant to pass on their exploding costs to their customers. I think they’ve been hoping the Fed was right. But I think they’re going to give up hope later in the year and they’re really going to start increasing prices at a much greater rate.”
June 15, 2021 – “The Fed is pretending that [inflation is] transitory because they really have no ability to control it. Because it’s the Fed that’s creating it. Every dollar of government spending has to be paid for. And right now, they’re not taxing and spending. They’re printing and spending. So, every time you’re paying higher prices, you’re really paying higher taxes. And taxes, unfortunately, are going way up, especially on the middle class.”
December 10, 2021 – “One of the ways the Fed’s been able to justify creating more inflation is because they claimed we didn’t have enough of it. But the only reason we didn’t have enough of it is because they were relying on their own highly rigged CPI.”
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