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Powell keeps referring to the 1970s when talking about inflation, when really he should be referring to the 1940s.

As long as they keep trying to fight 1940s-style inflation with 1970s-style monetary policy, they're going to have a bad time. Can't tighten policy this quickly when debts are this high and not break a lot of things.

https://void.cat/d/9SXVB4rfvGoYY3j9xVaQPC.webp

Petroit 2y ago

How was the inflation fought in 40s? And was it optimal strategy?

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Discussion

Hurvajs Rumcajs 2y ago

I recommend reading Lyn's articles to get more insight. She's been writing and talking about the 1940s (as a closest analog to the macro setup we find ourselfs in) for a long time.

Basically debt gets inflated away and govt closes all the exits for you to hide.

Hurvajs Rumcajs 2y ago

*the govt closes all the exits for you to escape.

(no edit button sucks sometimes)