Why cant the Fed achieve a normal inflation rate?
The answer is lack of money velocity. But why is money velocity so low?
Despite injecting trillions of dollars into the economy since 2008, money velocity remains low because consumers, goverments, and businesse are tapped out with record debt. They simply dont have the income to buy, shop, and purchase, which creates momemtum in the money supply.
The income from all this debt flows into the hands of the few, the banks, large investors etc. who put it into thd stock market and bonds, and real estate, inflating these assets to records levels. But this income does not circulate through the real economy.
Ask yourself: If the economy is doing so well why the hell are interest rates at record lows since 2008? Why cant they be normalsed? The same pattern exists all around the world.
At some point, we reach a tipping point, where consumers, mortgage holders, governments, businesses are so in debt that these assets become too risky. Investors lose confidence, bonds, real estate etc. are dumped as interest rates spike, we have stagflation.
In the next crisis, i predict central banks will issue their own digital currencies ie "Fedcoins". The power of indebted consumers (and governments) greatly diminished. However their coins will not be decentralized like Bitcoin. One more step towards central bank control since 1913.