Is the cure worse than the disease?

in #fed2 years ago

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In 1989, former Obama CEA chair Christina Romer and her husband David reviewed Federal Reserve records to "identify six times since World War II when the Federal Reserve moved to attempt to induce a recession to reduce inflation. They are October 1947, September 1955, December 1968, April 1974, August 1978, and October 1979."

At least four of those deliberate, planned recessions happened at times when crude oil prices had risen dramatically - like 2007-2008 and today.
https://www.richmondfed.org/publications/research/economic_review/1992/er780402

To raise the central bank interest rates when oil prices are soaring, is a sure fire omen of recession ahead - especially of the worst ones ('74, 2000, 2008)

Every postwar recession since 1957 has involved both a tighter Fed policy and a spike in global oil prices.

Every recession. Always.

Is this a coincidence?

Before we keep allowing this uncritically, like docile sheep, there needs to be more public discussion.

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