The US’s serious bout of inflation – mirrored in many countries in the world – was set in motion in the first week of March 2020, like much of the rest of our ongoing emergency. This was a fortnight before the lockdowns were announced, indicating that much was going on behind the scenes. The Federal Reserve turned on a dime to provide enormous liquidity to the system, just days following the CDC’s briefing of the national press of coming lockdowns, about which the Trump administration seemed then to know next to nothing.
The fiscal and monetary fun lasted only so long. Following the inauguration of the new president, the first round of bills started coming due, and that has continued until the present, rapidly wiping out the value of the stimulus payments that seemed to have made everyone suddenly rich without working.
Only after two years and after some 10 months of resulting declines in purchasing power, along with supply chain breakages that left so many goods in shortage, did the Fed start to worry and raise interest rates from zero percent. That was presumably designed to sponge up the excess liquidity that had been injected directly to the veins of economic life. The Fed’s action slowed but did not end what they had unleashed to deal with the virus that was widely advertised as universally deadly even though every specialist knew otherwise.
Hellbound and Down 