• Home
  • About
    • Welcome to the Institute
    • It’s Time
    • What is the Gold Standard?
    • Goals of The Gold Standard Institute
    • The Gold Standard Institute Emblem
    • Meet the People of The Gold Standard Institute
  • Gold Basics
    • Buying Gold and Silver
    • Commercial Paper vs. Real Bills
    • The Definition of Money
    • The Nature of Money
    • What is a Real Bill?
  • Journal
  • Archives
  • Classroom
  • Media
  • FAQ
  • Contact
Home > Uncategorized > The Fed’s Demand Destruction: What it Means for You and Me

The Fed’s Demand Destruction: What it Means for You and Me

February 17, 2023 by Philip Barton

February 13, 2023/0 Comments/by Monetary Metals
Fed Demand Destruction

If you listen to financial pundits talking about the Federal Reserve and the current state of the markets you might hear this term mentioned:

“Demand destruction.”

What is it? And what does it mean for you and me?

We’ll first discuss the mainstream understanding of the concept and then unpack why it’s more nefarious than you think.

The Mainstream (Wrong) Understanding of Demand Destruction

The mainstream idea goes something like this: The Federal Reserve stimulated economic activity when the markets were frozen from Covid, but now the economy is overstimulated. It’s too hot, like an overheating car engine.

People are spending too much money, and the prices of things are going up–inflation. The economy needs to cool down, and not overheat.

The Fed stimulates by lowering interest rates. Logically, the playbook for un-stimulating, and cooling things down, is to hike interest rates. Hiking interest rates tightens up credit, reduces demand, and therefore should brings prices down.

Seems plausible enough. But let’s dive deeper.

This is a must read in its entirety HERE

Filed Under: Uncategorized

Categories

Navigation

  • Home
  • About
  • Gold Basics
  • Journal
  • Archives
  • Classroom
  • Media
  • FAQ
  • Contact

Recent News

  • Jason Cozens – The Solution to Bank Risk is Gold
  • Did The Fed Just Pivot?
  • Keith Weiner: The Fed is Creating a Perfect Setup for New Gold Investors
  • Stefan Gleason: Sound Money Coming to Wyoming?
  • The Fed’s Demand Destruction: What it Means for You and Me

Contact Us

philipbarton@goldstandardinstitute.net

Related Websites

Gold Standard Institute US

Copyright © 2013. The Gold Standard Institute International. All rights reserved. Disclosures.
Website by Claire de Jong