At the end of 2022, Silicon Valley Bank was the 16th largest bank in the US by consolidated assets. It’s now the second largest bank to collapse in US history. Read on to find out what went wrong, and what lies ahead for the US economy.
Easiest move would be for the fed to say new inflation target is 4%. We only got super low inflation due to globalization anyways. Not sure why we are so married to 2%. If it’s about credibility, they have none after the transitory inflation bs.
The key to low inflation is keeping money supply growth at a moderate level. Globalisation and lower durable goods prices certainly helped to keep overall CPI inflation relatively low, but that simply allowed for more money supply growth than would have otherwise been possible, to achieve a similarly relatively low rate of CPI growth.
As to whether 2%, or 4% (or 0%, or any other number), is a better target, that's another big debate.
Perfect
Thank you!
Easiest move would be for the fed to say new inflation target is 4%. We only got super low inflation due to globalization anyways. Not sure why we are so married to 2%. If it’s about credibility, they have none after the transitory inflation bs.
The key to low inflation is keeping money supply growth at a moderate level. Globalisation and lower durable goods prices certainly helped to keep overall CPI inflation relatively low, but that simply allowed for more money supply growth than would have otherwise been possible, to achieve a similarly relatively low rate of CPI growth.
As to whether 2%, or 4% (or 0%, or any other number), is a better target, that's another big debate.