The Low Inflation Lie

If you believe government inflation rate numbers, inflation is 1.2%, according to the Consumer Price Index (CPI.) That’s how much prices rose last year. Last week, Fed Chairman Ben Bernanke testified in front of the Republican controlled House of Representatives and inflation was a hot topic. Even though the government says inflation is low, some lawmakers are not buying it.

The new leaders of key financial committees are not fans of the Federal Reserve or its money printing policies called quantitative easing (QE.) The Fed continues to do this to suppress interest rates, bail out banks and fund the government. CNNMoney.com reports, “Paul Ryan, a Republican from Wisconsin who heads the committee, has been a vocal opponent of the Fed’s recent stimulus policy, which pumps $600 billion into the economy through purchases of long-term Treasuries. He said he fears the policy, known as quantitative easing, will cause inflation to accelerate rapidly, forming asset bubbles and crushing the dollar. “There is nothing more insidious that a country can do to its citizens than debase its currency,” Ryan said. . . . But Bernanke countered that quantitative easing would not permanently increase the money supply, since the Fed plans to reverse the policy once the economy recovers.” (Click here for the complete CNN story.)

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