Hoenig Says Lower And Middle Classes Pay "Dear Price" For Fed Mistakes, Accuses Fed Of Commodity Price Inflation

Good timing on Fed governor Hoenig's part:  he speaks the truth as he is about to retire.


http://www.zerohedge.com/article/hoenig-says-lower-and-middle-classes-pay-dear-price-fed-mistakes-accuses-fed-commodity-price

"While some of the increase may reflect global supply and demand conditions, at least some of the increase is driven by highly accommodative monetary policies in the United States and other economies."

For those terrified by the ravages of deflation: "I tracked the average growth of money and the price levels in the United States from the 19th century to the present (Chart 3). It should surprise no one that there is a striking parallel between the long-run growth of money and the growth in the price-level index. From the end of World War II alone, the price index has increased by a factor of ten. With such a track record, it is hard to accept that deflation should be the world’s dominant concern."


"Central bankers must look to the long run. If current policy remains in place, we almost certainly will stimulate the growth of asset values and inflation. This may temporarily increase GDP and employment, but in the long run, we risk instability, damaging inflation and lost jobs, which is a dear price for middle and lower income citizens to pay."