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Why Is The Fed Collapsing The U.S. Economy?

It is mindless to raise interest rates in the face of collapsing consumer demand, so the real question is…

by Paul Craig Roberts via PaulCraigRoberts.org

The Federal Reserve has a long record of mistaken decisions.  Unless the Federal Reserve’s intent is to collapse the economy, the current policy of higher interest rates will go down as the most mistaken reading of the economy since the Great Depression.

Prices are rising sharply in Germany, UK, and Europe, but not because of an increase in money creation. They are rising because US Sanctions against Russia have reduced the supply of energy and disrupted transportation. Supply reductions have driven up prices of everything dependent on energy and transportation.

The US is not experiencing these problems to the same extent.  Energy prices have risen some, because the companies are taking advantage of the situation.

In the US higher prices are due to shortages resulting from the lockdowns that closed businesses and broke supply chains.  In America’s global world, problems abroad restrict supply here.  The point is that the inflation is not a monetary inflation. Therefore, the Federal Reserve’s policy of raising interest rates is nonsensical. Higher interest rates just add to costs, shrink supply, and mean higher prices.

If the Federal Reserve actually knows what it is doing, it is intentionally trying to cause an economic collapse, which makes me wonder if the Federal Reserve is in league with Klaus Schwab’s WEA plan to cause crises that can be used to establish heavy-handed rule.

The latest news in the US, if not fabricated, is that consumer demand is collapsing.  Federal Express reports that its business is hurting because orders are declining. Merchants report that consumer traffic is off. The real estate market has been brought to a halt. It is mindless for the Federal Reserve to raise interest rates in the face of collapsing consumer demand.

So the real question is: what is the Federal Reserve really up to?

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