by Peter Schiff, Schiff Gold:

Former Federal Reserve Chairman Paul Volcker passed away last week. Volker was appointed by President Jimmy Carter, but served most of his term under President Ronald Reagan. Volker was best-known for fighting inflation with interest rate hikes. At the peak, Volker pushed rates all the way to 20%.

Peter talked about Volcker in a recent podcast, noting that he was credited with slaying the inflation monster that today’s Fed seems happy to resurrect.

Volcker took a lot of heat from officials in government for allowing rates to rise so high. Peter said that notably, Reagan was not critical of Volcker’s strategy.

Unlike Donald Trump, Ronald Reagan stood by Paul Volcker. He was his ally and he never criticized Volcker for high interest rates where everybody else was criticizing him, from Main Street, to Wall Street, to the Capitol, but Reagan stood by his Fed chairman.”

In hindsight, Volcker has a lot of respect. Peter said he was the last decent Fed chairman.

I wish he had been a little more critical of his predecessors, but there’s some kind of unwritten rule among Fed chairmen that you never speak ill about anybody who has the job after you. But I wish he had, because I’m sure he had some ill-will, he had some feelings that we were making mistakes, and he could have been more vocal in his criticism.”

Jerome Powell opened up his press conference at the conclusion of last week’s FOMC meeting with a tribute to Volcker. Powell talked about how the former Fed chair slew inflation. Peter called the tribute “ironic.”

As we are burying Paul Volcker, Powell is now helping to resurrect the high inflation. So, we’re bringing that back to life now that Paul Volcker has passed away. So, maybe he will rest in peace unless he’s going to end up rolling around in his grave based on all the inflation that is going to be ravaging the country.”

Peter noted that the post-FOMC press conference focused more on inflation than any other Powell has had. The Fed chair talked about low inflation, how we don’t have enough inflation and insisted we need more inflation.

Which of course is the opposite of what the Fed should be doing. The Fed should be saying, ‘We don’t have a lot of inflation. That’s great. And we’re going to make sure it stays that way.’”

After all, the Fed’s mandate is stable prices.

Ironically, we got the official CPI numbers before the Powell press conference and they were a bit higher than expected. Year-over-year, headline inflation is up 2.1%. And the core inflation number was up 2.3%.

So, we have inflation, both as measured by the core and the headline CPI that is running above the Fed’s 2% target.”

But as Peter noted, the Federal Reserve doesn’t really have a 2% target anymore. It has a “symmetrical” 2% target, which allows inflation to rise above 2%.

The Fed has already come out and said it wants to have higher inflation in the future to make up for not enough inflation in the past.”

During his press conference, Powell even talked about the “dangers” of inflation being too low. Keep in mind, whenever you hear somebody say inflation is too low, they are telling you your cost of living isn’t going up fast enough.

Then it really hits you – the absurdity of what they’re expecting you to swallow. But, of course, Wall Street swallows it … This stuff is a bunch of nonsense. People should see through this and start to question the irrationality of what the Fed is saying, to try to see through it to their real agenda, because the Federal Reserve knows inflation is bad. The Federal Reserve knows the cost of living going up is a bad thing.”

In truth, the last thing the Fed wants is higher inflation because the last thing it wants to do is actually fight inflation.

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