Where Not To Go If Inflation is Real

The Fed ignores inflation because it refuses to accept responsibility for causing it. This denial means that something’s gotta give. If the Fed continues QE2 through June, this inflation will continue, and may even accelerate. Furthermore, it will have residual momentum. It may take on a life of its own even when and if the Fed does stop printing.

In the meantime, according to tax collections and other data that I track in the Wall Street Examiner Professional Edition Fed Report, the economy is stalling. That conclusion is supported by today’s weak industrial production data. So the Fed is now in a Catch 22. If it stops the money printing, yes inflation may subsequently slow, but the illusion of economic growth will also be laid bare. If it doesn’t stop the money printing, inflation will continue to rocket upward, and the economy will be forced to contract due to the inability of customers to bear increasing costs, not to mention supply chain disruptions. So choose your poison.