ZH: Powell Warns Of “Economic Pain” From Tightening, Says “Historical Record Cautions Against Loosning Policy Prematurely” World Bank warns of stagflation


The USA inflation rate has been at a four decade high in the USA. Rising inflation is consistent with something in my book Biden-Harris: Prophecies and Destruction:

 Make no mistake about it — massive inflation is coming.

The U.S.A. dollar will ultimately crash and be worthless. That “pride” of American power will be broken (cf. Leviticus 26:19). …

Inflation will eventually hit the U.S.A. extremely hard.

And, one day inflation will be much worse it is than now.

What is the plan to deal with inflation in the USA?

Well, the head of the US Federal Reserve spoke today and pointed to another rise in interest rates:

Powell Warns Of “Economic Pain” From Tightening, Says “Historical Record Cautions Against Loosning Policy Prematurely”

August 26, 2022

Fed Chair Jerome … Powell’s speech, including highlights:

  • Powell: Size of Sept. Rate Hike Hinges on ‘Totality’ of Data
  • Powell: Will Likely Require Restrictive Policy for Some Time
  • Powell: History Cautions Against ‘Prematurely’ Loosening Policy
  • Powell: “inflation has just about everyone’s attention right now, which highlights a particular risk today: The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched.”

Quoting from both Volcker and Greenspan, Powell lays out his speech in the form of three distinct lessons:

  1. The first lesson is that central banks can and should take responsibility for delivering low and stable inflation. It may seem strange now that central bankers and others once needed convincing on these two fronts, but as former Chairman Ben Bernanke has shown, both propositions were widely questioned during the Great Inflation period.
  2. The second lesson is that the public’s expectations about future inflation can play an important role in setting the path of inflation over time. Today, by many measures, longer-term inflation expectations appear to remain well anchored. That is broadly true of surveys of households, businesses, and forecasters, and of market-based measures as well. But that is not grounds for complacency, with inflation having run well above our goal for some time. If the public expects that inflation will remain low and stable over time, then, absent major shocks, it likely will. Unfortunately, the same is true of expectations of high and volatile inflation. During the 1970s, as inflation climbed, the anticipation of high inflation became entrenched in the economic decisionmaking of households and businesses. The more inflation rose, the more people came to expect it to remain high, and they built that belief into wage and pricing decisions… Inflation has just about everyone’s attention right now, which highlights a particular risk today: The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched.
  3. That brings me to the third lesson, which is that we must keep at it until the job is done. History shows that the employment costs of bringing down inflation are likely to increase with delay, as high inflation becomes more entrenched in wage and price setting. The successful Volcker disinflation in the early 1980s followed multiple failed attempts to lower inflation over the previous 15 years. A lengthy period of very restrictive monetary policy was ultimately needed to stem the high inflation and start the process of getting inflation down to the low and stable levels that were the norm until the spring of last year. Our aim is to avoid that outcome by acting with resolve now.

The Fed Chair also had a very clear warning to the US: pain is coming:

Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.

Putting it together, Powell concludes that “these lessons are guiding us as we use our tools to bring inflation down. We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored. We will keep at it until we are confident the job is done.” https://www.zerohedge.com/markets/watch-live-fed-chair-powell-speaks-jackson-hole

So, the view is that although stagflation is bad because of raising interest rates, because of rising inflation, higher rates look to come and will have to be tolerated.

Related to inflation, the Continuing Church of God (CCOG) put together the following video:


Inflation: When Money Fails

Inflation has been higher in 2022 than it has been for decades in the USA, Europe, and many other lands. What are some of the disruptions that inflation can cause? What about hyperinflation affecting places like Venezuela? Did the Book of Haggai predict inflation? Is food price inflation associated with the ride of the third horseman of the Apocalypse? Does sin and government mismanagement cause inflation? Are there physical things one can do about inflation? What about storing food or buying gold? Will gold outlast the USA dollar? Why might some throw their gold in the street as Ezekiel prophesied? What should God’s people do about inflation? What did Jesus teach about food worries? What about seeking the Kingdom of God? Steve Dupuie and Dr. Thiel cover these matters.

Here is a link to our video: Inflation: When Money Fails.

If governments would not have printed up so much debt money for political and other reasons, inflation would not be as much of an issue. But because many have, stagflation is more and more seen as likely.

Slowing down the economy to deal with inflation by raising interest rates causes other problems.

Some are concerned that raising interest rates, which is what Jerome Powell is advocating, may push world economies into stagflation or worse.

Yet, some, like World Bank President David Malpass (who is shown in the tweet at the beginning of this post) point to increasing output instead of moving towards stagflation as a better way to proceed:

World Bank’s Malpass Worries Stagflation to Persist on Weak Supply

  • Greater output needed from big economies to bring down prices
  • US must find out how it can ‘produce a lot more of everything’

August 26, 2022

World Bank President David Malpass says the global economy may be stuck in a stagflation quagmire for a while unless large economies can increase production dramatically.

“Stagflation is hard to get out of,” he said in an interview Friday with Bloomberg Television’s Surveillance …

Federal Reserve Chair Jerome … Powell said lowering inflation to the 2% target is the central bank’s “overarching focus right now” even though it will mean economic pain for consumers and businesses.

“The Fed, as it’s raising interest rates, is fighting uphill with the friction in the global system,” Malpass said. “You’re getting that reduction in demand as the rate hikes go through, but not getting commensurate supply increases. That’s where the focus needs to be for the central banks.”  …

“Stagflation means higher inflation than you want and lower growth, and clearly we have that,” he said. “In the history books, they’ll maybe mark it as, we hope, a short period.

“But my worry is for developing countries, and people in lower income levels, is that the stagflation may last for quite a while,” he said. “They get hurt because the inflation hurts them and the slow growth hurts them at the same time.” US inflation is above 8% annually, its highest since the 1980s. https://www.bloomberg.com/news/articles/2022-08-26/world-bank-s-malpass-worries-stagflation-persists-on-weak-supply

Yes, if there is more supply (more goods produced) this would help reduce the inflation rate as well as generally improve the economies of those that produce more. This, in theory, is a much better solution–but it is not the direction from the US Federal Reserve as it likely believes that it cannot do much to improve needed production–and one thing that needs more production is food.

Notice also the following:

What is Stagflation?

Stagflation is an economic event in which the inflation rate is high, economic growth rate slows, and unemployment remains steadily high. Such an unfavorable combination is feared and can be a dilemma for governments since most actions designed to lower inflation may raise unemployment levels, and policies designed to decrease unemployment may worsen inflation. accessed 03/02/22 https://corporatefinanceinstitute.com/resources/knowledge/economics/stagflation/

So, stagflation is inflation without growth.

But that is not the only problem, increased interest rates will lead to increased debt as well for the USA. One day this will cause a destructive vicious circle that the US economy will not get out of.

I warned earlier this year about the prospect of stagflation (see Supply chain, inflation, stagflation?).

We now look set for at least some of that to happen.

This will harm many in the USA and many around the world.

Jesus warned of famines (Matthew 24:4-8) as part of the beginning of sorrows. The Book of Revelation warned about food shortages and food price inflation associated with the ride of the third horseman of the Apocalypse (Revelation 6:5-6).

Looking to increase food and energy production would seem to better solutions than raising interest rates, but that does not seem to be a high priority for the US Federal Reserve, the Biden-Harris Administration, nor most of the politicians in Washington, D.C.

Some items of possibly related interest may include the following:

Might the U.S.A. Be Gone by 2028? Could the USA be gone by the end of 2028 or earlier? There is a tradition attributed to the Hebrew prophet Elijah that humanity had 6,000 years to live before being replaced by God’s Kingdom. There are scriptures, writings in the Talmud, early Christian teachings that support this. Also, even certain Hindu writings support it. Here is a link to a related video: Is the USA prophesied to be destroyed by 2028? In Spanish: Seran los Estados Unidos Destruidos en el 2028?
Four Horsemen of the Apocalypse What do each of the four horseman of the Apocalypse represent? Have they began their ride? Did Jesus discuss the any of this? Might their rides coincide with the “beginning of sorrows? Do they start their ride prior to the Great Tribulation? Did Nostradamus or any other ‘private prophets’ write predictions that may mislead people so that they may not understand the truth of one or more of the four horseman? There is also a related YouTube video titled Sorrows and the Four Horsemen of the Apocalypse.
The End of US Dollar Dominance Is the USA losing its economic status? What about the petro-gold-yuan? A related video is also available: US Dollar being challenged by Gold-Petro-Yuan.
Who is the King of the West? Why is there no Final End-Time King of the West in Bible Prophecy? Is the United States the King of the West? Here is a version in the Spanish language: ¿Quién es el Rey del Occidente? ¿Por qué no hay un Rey del Occidente en la profecía del tiempo del fin? A related sermon is also available: The Bible, the USA, and the King of the West.
USA in Prophecy: The Strongest Fortresses Can you point to scriptures, like Daniel 11:39, that point to the USA in the 21st century? This article does. Two related sermon are available: Identifying the USA and its Destruction in Prophecy and Do these 7 prophesies point to the end of the USA?
When Will the Great Tribulation Begin? 2022, 2023, or 2024? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede la Gran Tribulación comenzar en el 2020 o 2021? ¿Es el Tiempo de los Gentiles? A related video is: Great Tribulation: 2026 or 2027? A shorter video is: Can the Great Tribulation start in 2022 or 2023? Here is a video in the Spanish language: Es El 2021 el año de La Gran Tribulación o el Grande Reseteo Financiero.
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? Does God have 7,000 year plan? What year may the six thousand years of human rule end? When will Jesus return? 2030 or 20xx? There is also a video titled 6000 Years: When will God’s Kingdom Come? Here is a link to the article in Spanish: ¿Tiene Dios un plan de 6,000 años?
The Plain Truth About Gold in Prophecy. How Should a Christian View Gold? What do economists and the Bible teach about gold? Gold and silver may drop in value. Inflation/deflation? What do Christians need to know about gold?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, English, Scottish, Welsh, Australians, Anglo-Saxon (non-Dutch) Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? What will happen to Jerusalem and the Jews in Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo-Saxon nations? Why might God allow them to be punished first? Here is a link to the Spanish version of this article: Anglo-América & las Tribus Perdidas de Israel. Information is also in the YouTube sermons titled Where are the Ten Lost Tribes? Why does it matter? and British are the Covenant People. A short YouTube of prophetic interest may be: Are Chinese threats against Australia for real?
Will the Anglo-Saxon-Celtic Nations be Divided and Have People Taken as Slaves? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What about Jerusalem? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people? Here is a link to a video titled Will the USA and other Anglo-nations be Divided and Their People Made Slaves? Here is a related item in the Spanish language ¿Serán divididas las naciones anglosajonas?
Is God Calling You? This booklet discusses topics including calling, election, and selection. If God is calling you, how will you respond? Here is are links to related sermons: Christian Election: Is God Calling YOU? and Predestination and Your Selection. A short animation is also available: Is God Calling You?
Christian Repentance Do you know what repentance is? Is it really necessary for salvation? Two related sermons about this are also available: Real Repentance and Real Christian Repentance.

When You Sin: Do You Really Repent? This is an article by Charles F. Hunting. A related sermon is Confess to God and truly repent.
Just What Do You Mean — Repentance? Do you know what repentance is? Have you truly repented? Repented of what? Herbert W. Armstrong wrote this as a booklet on this important subject.
The Gospel of the Kingdom of God This free online pdf booklet has answers many questions people have about the Gospel of the Kingdom of God and explains why it is the solution to the issues the world is facing. Here are links to four related sermons: The Fantastic Gospel of the Kingdom of God!, The World’s False Gospel, The Gospel of the Kingdom: From the New and Old Testaments, and The Kingdom of God is the Solution.
Biden-Harris: Prophecies and Destruction Can the USA survive two full presidential terms? In what ways are Joe Biden and Kamala Harris apocalyptic? This book has hundreds of prophecies and scriptures to provide details. A Kindle version is also available and you do not need an actual Kindle device to read it. Why? Amazon will allow you to download it to almost any device: Please click HERE to download one of Amazon s Free Reader Apps. After you go to your free Kindle reader app (or if you already have one or a Kindle), you can go to: Biden-Harris: Prophecies and Destruction (Kindle) to get the book in seconds.

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