What's the greatest threat to the financial system?

Contrary to conventional wisdom, one commentator believes that it is not central bank rate decisions which determine inflation/deflation. What's more, whilst we worry about interest rates, we ignore a much more serious issue.

This article has been based upon a recent 16-page essay by H. Woody' Brock*, entitled "Inflation Its Origins, and Likely Behaviour". We start with part of his opening paragraph.

"Never in our memory has discussion of such an important issue been as devalued as this has been of late, with non-sensical assertions about "liquidity" and "the Fed" issued by people who ought to know better. In particular, the widespread assumption that monetary policy is Fed funds rate manipulation and nothing more is especially problematic. So is the equally widespread belief that changing the Fed funds rate is the correct way to control growth of the economy and inflation on Main Street (e.g., the Consumer Price Index [CPI]) and inflation on Wall Street (e.g., asset bubbles). This is a reductio ad absurdum at best, and a contradiction in terms at worst!"

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