We collect cookies to analyze our website traffic and performance; we never collect any personal data. Cookie Policy
Accept
The Tycoon Herald
  • Trending
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Money
    • Crypto / NFT
  • Innovation
  • Lifestyle
    • Lifestyle
    • Food
    • Travel
    • Fashion
    • Leadership
  • Health
  • Sports
  • Entertainment
Reading: The Inflation Cycle Has Arrived
Sign In
The Tycoon HeraldThe Tycoon Herald
Font ResizerAa
Search
  • Trending
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Money
    • Crypto / NFT
  • Innovation
  • Lifestyle
    • Lifestyle
    • Food
    • Travel
    • Fashion
    • Leadership
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© Tycoon Herald. All Rights Reserved.
The Inflation Cycle Has Arrived
The Tycoon Herald > Money > The Inflation Cycle Has Arrived
Money

The Inflation Cycle Has Arrived

Tycoon Herald
By Tycoon Herald 5 Min Read
Share
SHARE

Traders work on the floor of the New York Stock Exchange Stan HONDA

AFP via Getty Images

Here comes the big hit. Call it a reckoning for human nature overriding basic truths – where feelings of superiority mocked history’s hard-earned lessons, and now comes the payback.

Contents
The ignitor of the Great Reckoning is inflationThe Federal Reserve’s inactions add gasoline to the inflationary fireBut…The bottom line… The inflationary cycle has started

Call it the Great Reckoning because the fallacies supporting the “New Normal” cover the waterfront. The powerful dual causes behind all the missteps are the U.S. government’s trillion-dollar deficit spending and the Federal Reserve’s forced negative-real interest rates while it created money to buy and warehouse $trillions in bonds.

The ignitor of the Great Reckoning is inflation

The irrefutable measure of all-is-not-well is inflation – the cheapening of a country’s currency. Protecting the currency is a primary responsibility of both the U.S. government and the Federal Reserve. Having both protectors go so far off track, even to pursue “good works,” is the recipe for a nasty comeuppance in the end.

To see how out of whack the current environment has become because of inflation, look at the longer-term graph of interest rates vs the CPI annual rate of change (the red, dotted line).

Red dots = CPI – Yields from top: Baa, Aaa, UST: 10-yr, 5-yr, 2-yr, 3-mo

John Tobey (FRB of St Louis – FRED)

The CPI’s burst of strength is not a supply issue. It is the inevitable fallout from $trillions in excessive deficit spending and debt issuance. Worse, inflation’s rise is producing incentives that could entice $trillions of excess cash into action along with $trillions of potential bank lending (the other source of real money supply growth). Add to all that the U.S. Government’s desire to deficit spend $trillions more. That enormous increase of money beginning to flow hither and yon, once started, will be unstoppable without drastic actions being taken.

The Federal Reserve’s inactions add gasoline to the inflationary fire

Meanwhile, the Federal Reserve sits, holding rates near zero. (Sure, they’ve said they may increase them in 2022, but they’ve already waited too long.)

MORE FOR YOU

What a huge mistake. Once inflation gets a toehold, it is difficult to turn around without making unsettling financial adjustments and producing economic pain. In the late 1960s and early 1970s, the Federal Reserve was actively, but only periodically, bumping rates up to temper inflation’s rise. They failed.

Remember, the Federal Reserve and other leading economists made the erroneous, wishful pronouncements that this inflation rise was temporary, soon to settle. Instead it unleashed a bout of price raising. Now they are taking the lukewarm position similar to the response in “Don’t Look Up” as a planet-killer comet approaches earth: “Sit tight and assess.”

But…

I know. Looking out the window, listening to the news, and tracking the stock market make everything look normal (except for Covid). You’re right. And the December 2021 Google Trends (of searches) shows the lack of inflation interest vis-a-vis Covid in the financial world.

Dec. 2021 – U.S. financial searches for Covid outweigh those for inflation

John Tobey (Google Trends – trends.google.com)

The problem is… A lack of worry about inflation doesn’t mean it’s not a concern. This is exactly the type of environment that can produce a dramatic shakeup. Rising inflation is one of those insidious risks that, even when it becomes evident, does not hit us emotionally right away. Instead, it creates a steady erosion of purchasing power.

The bottom line… The inflationary cycle has started

Beware the inflationary cycle. When it begins, it gives the false impression of growth and increased well-being. However, it soon becomes a race for protection and gain that creates inequalities and takes time from productive activities to use in inflation finance management.

The cycle roughly begins with excess money spurring demand-driven price rises for both organizations and consumers. Those higher costs hit budgets that require making negative adjustments. When the costs go beyond “temporary” there is the felt need for more income, and actions are taken. At that point, the inflationary cycle is in full bloom.

As budget planning shifts from 2021 to 2022, inflation becomes important

getty

You Might Also Like

Residing Paycheck to Paycheck: 9 Genius Methods To Cease It Ceaselessly – Dollarsanity

10 Tricks to Reside Frugally After Retirement – Dollarsanity

Tips on how to Price range Your Money Utilizing Dave Ramsey’s Budgeting Percentages – Dollarsanity

How To Make A Funds: 12 Simple Methods To Do It (The Full Information) – Dollarsanity

10 Outdated-Normal Cleansing Suggestions from Grandma – Dollarsanity

TAGGED:MoneyThe Forbes Journal
Share This Article
Facebook Twitter Email Copy Link Print
Sydney Sweeney Breaks Down in Tears Upon ‘Christy’ Standing Ovation at TIFF
Entertainment

Sydney Sweeney Breaks Down in Tears Upon ‘Christy’ Standing Ovation at TIFF

Sydney Sweeney Tears Circulation at TIFF ... With Large Standing Ovation for 'Christy'!!! Printed September 5, 2025 3:49 PM PDT Sydney Sweeney is receiving a heap of reward for her…

By Tycoon Herald 2 Min Read
US Open: Carlos Alcaraz denies ailing Novak Djokovic to succeed in second last in New York
September 5, 2025
‘The Conjuring: Final Rites,’ ‘Twinless,’ ‘Highest 2 Lowest’ on ‘TMZ Film Tea’
September 5, 2025
Trump Threatens to Revoke Rosie O’Donnell’s US Citizenship
September 5, 2025
St Helens 4-18 Wigan Warriors: Defending Tremendous League champions enhance top-two ambitions
September 5, 2025

You Might Also Like

Wedding ceremony On A Funds: Get K-Like Wedding ceremony For K or Much less – Dollarsanity
Money

Wedding ceremony On A Funds: Get $30K-Like Wedding ceremony For $5K or Much less – Dollarsanity

By Tycoon Herald 19 Min Read
80 Issues I Stopped Shopping for to Save Money Quick and Pay Off Debt – Dollarsanity
Money

80 Issues I Stopped Shopping for to Save Money Quick and Pay Off Debt – Dollarsanity

By Tycoon Herald 38 Min Read
50 Small Business Concepts For Ladies – Dollarsanity
Money

50 Small Business Concepts For Ladies – Dollarsanity

By Tycoon Herald 35 Min Read

More Popular from Tycoon Herald

MEET THE FATHER OF COADUNATE ECONOMIC MODEL
BusinessTrending

MEET THE FATHER OF COADUNATE ECONOMIC MODEL

By Tycoon Herald 2 Min Read
Woman Sentenced to 7 Days in Jail for Walking in Yellowstone’s Thermal Area

Woman Sentenced to 7 Days in Jail for Walking in Yellowstone’s Thermal Area

By Tycoon Herald
Empowering Fintech Innovation: Swiss Options Partners with Stripe to Transform Digital Payments
InnovationTrending

Empowering Fintech Innovation: Swiss Options Partners with Stripe to Transform Digital Payments

By Tycoon Herald 7 Min Read
Fashion

The Full Information To Tonal Dressing | FashionBeans

You don’t should be a style sufferer to check out tonal dressing. As soon as upon…

By Tycoon Herald
Sports

Michael van Gerwen: ‘Neck harm’ sustained whereas ‘making an attempt on a shirt’ pressured Premier League withdrawal, Vincent Van der Voort reveals

Michael van Gerwen was pressured to withdraw from final week's Premier League Darts assembly after sustaining…

By Tycoon Herald
Trending

U.S. Blew Up a C.I.A. Post Used to Evacuate At-Risk Afghans

A controlled detonation by American forces that was heard throughout Kabul has destroyed Eagle Base, the…

By Tycoon Herald
Leadership

Northern Lights: 17 Best Places To See Them In 2021

Who doesn’t dream of seeing the northern lights? According to a new survey conducted by Hilton, 59% of Americans…

By Tycoon Herald
Real Estate

Exploring Bigfork, Montana: A Little Town On A Big Pond

Bigfork, Montana, offers picturesque paradise in the northern wilderness. National Parks Realty With the melting of…

By Tycoon Herald
Leadership

Leaders Need To Know Character Could Be Vital For Corporate Culture

Disney's unique culture encourages young employees to turn up for work with smiles on their faces.…

By Tycoon Herald
The Tycoon Herald

Tycoon Herald: Your instant connection to breaking stories and live updates. Stay informed with our real-time coverage across politics, tech, entertainment, and more. Your reliable source for 24/7 news.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact Us

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Terms of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices
© Tycoon Herald. All Rights Reserved.
Welcome Back!

Sign in to your account

Lost your password?