Inflation is now raging, largely due to the record $trillions of new money the Federal Reserve has issued in monetary stimulus while keeping interest rates at historic lows.
As central banks around the world conduct the greatest monetary experiment in human history in real-time around us, it’s important to keep the Bullwhip Effect in mind.
The mathematical odds that the world’s many central planners, with their manifold partners in distributing fiat liquidity, are going to have the finesse to successfully steer their ships to safety through the shoals of inflation and deflation that threaten on either side, are very low. And that’s before taking into account the unintended consequences of their more extreme measures.
Bottom line: If another liquidity crisis hits (which many of the experts I interview every week on this program worry is a real possibility in the future), the one thing we can count on is that the response from our leaders will be ill-fitting to the situation.