A excerpt from an article cross-posted on a community site, unfortunately the poster din't mention the source.
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I know. I've seen this movie once before. And the script will forever be ingrained in my mind. It was 1978. Jimmy Carter was president. Oil prices had been surging for nearly seven years.
Other commodities -- including silver, gold and food -- were following closely behind. Wholesale prices, import prices and the price of critical resources were climbing swiftly.
Most important, the Fed's pipe-smoking Chairman Arthur Burns, fearing a chain reaction of financial failures, pumped up the money supply with wild abandon, slashed interest rates -- and set the stage for the worst U.S. inflation since the Civil War.
I saw it all, but I didn't believe it. I assumed Burns would come to his senses, see the obvious danger of inflation and reverse course.
But I assumed wrong.
Burns plowed ahead regardless of all the signs. He gave lip service to fighting inflation, while continuing to print money. And sure enough, about a year and half after he left the Fed, consumer price inflation was roaring at double-digit rates.
Today, 30 years have gone by.
Instead of Burns, we have Bernanke; instead of Carter, we have Bush.
And while I marvel at how much the world has changed, it never ceases to amaze me how little the Fed has learned.
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I know. I've seen this movie once before. And the script will forever be ingrained in my mind. It was 1978. Jimmy Carter was president. Oil prices had been surging for nearly seven years.
Other commodities -- including silver, gold and food -- were following closely behind. Wholesale prices, import prices and the price of critical resources were climbing swiftly.
Most important, the Fed's pipe-smoking Chairman Arthur Burns, fearing a chain reaction of financial failures, pumped up the money supply with wild abandon, slashed interest rates -- and set the stage for the worst U.S. inflation since the Civil War.
I saw it all, but I didn't believe it. I assumed Burns would come to his senses, see the obvious danger of inflation and reverse course.
But I assumed wrong.
Burns plowed ahead regardless of all the signs. He gave lip service to fighting inflation, while continuing to print money. And sure enough, about a year and half after he left the Fed, consumer price inflation was roaring at double-digit rates.
Today, 30 years have gone by.
Instead of Burns, we have Bernanke; instead of Carter, we have Bush.
And while I marvel at how much the world has changed, it never ceases to amaze me how little the Fed has learned.
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