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Missing The Inflationary Forest For The Trees (Part 2)

October 11, 2021

Part I of this article described how the Fed hides behind stable goods prices to disavow any responsibility for asset bubbles.  Part II, here, describes how the Fed hides behind ‘shortages’ and ‘supply chain disruptions’ to disavow any responsibility for higher goods prices.

On occasion, the impact from central bank policies are so sudden and sharp that they quickly undermine the normal functioning of even a well-balanced economy.  The Fed’s post-pandemic policies are of this type.  While even the Fed is forced to acknowledge the enormous supply disruptions that today’s economy is riddled with, the Fed refuses to accept any responsibility for these disruptions.  As described here, the Fed’s post-pandemic policies – which were necessary prerequisites to the government’s policy responses – were the equivalent of throwing a wrench into a jet engine.  Consequently, the resulting shortages and supply chain disruptions should surprise no one. 

If you are as old as me, then you’ve probably seen “The Blues Brothers.”  If so, you might remember this scene.  It applies perfectly to the Fed and how they have all sorts of excuses for why inflation isn’t their fault.

Sorry for not getting an article out last weekend.  I am in the middle of changing jobs.  (all the talk about ceasing capital investments in fossil fuel energy was greatly undermining the prospect of energy related projects going forward).  I’m staying in the Houston area and hope things settle down soon. 


After serving six years in the U.S. Air Force and obtaining the rank of Captain, Peter Schmidt has spent the rest of his professional career in the petrochemical, oil refining and power generation industries.  He has worked as a rotating equipment engineer at chemical plants and refineries in Louisiana, New Jersey, St Croix and Texas, and has consulted in these industries as well.  He has travelled to Angola, Argentina, Australia, Austria, England, France, Germany, Japan, Libya, Scotland, South Korea, Spain, Turkey and the UAE to complete various short-term assignments. Given his military and technical background, Peter was particularly struck by the fact so few attempts had been made to comprehensively understand the financial crisis.  It was this that prompted him to prepare the information on this website as well as the book he is seeking to publish – Elites in Name Only – the Financial Crisis.  Peter has B.S. and M.S. degrees in mechanical engineering from Lehigh University, is a licensed professional engineer in California and Louisiana, and a private pilot.  He is the holder of two patents.   

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