Federal Reserve Chairman Jerome Powell is gambling money creation ๐ธ will create massive inflation for assets, but not price consumer expenditures! ๐น
The Federal Reserve created 3.5T from 2008 to 2014.
+400% in 6 years
+66% per year
While in 2020 alone, the Federal Reserve created over 3T.
+73% in 1 year
Let pretend Federal Reserve creates 10T in 2020.
+243% in 1 year
๐๐ฝYearly Changes of PCE chain index
1.8% 2004-2019
1.7% 2008-2014
1.3% 2014-2019
Massive inflation did not occur in PCE and stayed below 2%, due to deflationary forces like cheap foreign labor and technology.
While asset prices significantly appreciated much higher than 2%.
If the United States brings back manufacturing or trade war intensifies with China, expect higher inflation of PCE to occur!
The Federal Reserve targets a 2% PCE inflation but ignores asset inflation. ๐ค
You must own assets to be wealthy.