Happy Times Are Here Again (Not)

The last time inflation was this high was in February of 1982. Paul Volcker had already turned off the free money and the Fed Funds rate was 15%. I remember that when we moved to the US in 1983, I had a CD at 15%. We were fortunate to get a mortgage at 9.75%.

Volcker stuck to his commitment to bring down inflation and kept rates high, even though the economy had gone into recession. I keep reading pieces that claim the Fed will be making a “policy error” by tightening into a recession. That’s a joke as far as I am concerned. The policy error was made years ago. We shouldn’t be here and the only survivable way out is through recession or depression. The other exit is hyperinflation and that’s a horror show.

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