Whether you subscribe to a capitalist system or a socialist economic system you will need a reliable and stable currency to complete transactions. The Federal Reserve regulates the money in America, but what is it doing to rectify the inflation issues at hand? With so much at stake, it is no wonder that inflation has become such a pressing issue within our economy. Rising prices are challenging businesses and consumers alike as they struggle to deal with inflationary pressures. Many questions about what exactly the Federal Reserve is doing to address these issues, but unfortunately there do not seem to be any easy solutions in sight other than raising interest rates that affect all of us.
Perhaps the biggest problem facing the Federal Reserve is that inflation is difficult to predict and understand. Changes in consumer preferences, shifts in supply and demand, and higher import costs due to tariffs - all of these factors can play a role in inflation levels and have a significant impact on business activity. As a result, it can be extremely challenging for investors and policymakers alike to predict inflation trends with any degree of accuracy or certainty.
What is the outlook for getting inflation under control? Currently, The FED is hiking interest rates, essentially forcing us into an economic depression in order to slow down demand so that we can essentially catch up on both production and financially from the burdens that we took on during the COVID pandemic. One issue may be that we are so used to the fast-paced get everything that we need an economic system that we are unwilling to SLOW down. Can we reduce demand and drive down inflation? Page 24 of our textbook, the section features details about the roles that our government plays in our American economic system. "When the economy expands so fast that inflation results the government may intervene to reduce inflation by slowing down economic growth. This can be accomplished by raising interest rates to discourage spending by businesses and consumers."
This seems hard to get my mind around and it feels as if there is another option than stunting our economic growth. Described in this article as using a blunt tool that they are unable to control or predict, so what now? Interestingly the author discusses the idea that money doesn't really exist until humans create the power associated with it (supply and demand), create the rules, and also the issues that regulate it. This includes inflation. "
"We don't think of money or paper money as technology, but we should. It was. It was a tool, in this case, that made a transaction, made exchange much more efficient." Jacob Goldstein
The author continues on for some time exploring the concepts regarding how money was created and the inefficiencies of paper money; all of which leaves me to wonder if this is truly the world's transition into Cryptocurrency.