Cheapening of the dollar threatens our economy
Several letters have appeared in this column concerning the price of gasoline at the pump, which is close to $4 per gallon or more. Virtually no complainer understands that this is the effect of the Federal Reserve Zero Interest Rate Policy (ZIRP). People want to believe oil companies, refiners and pump operators are somehow responsible.
In the March 1 News, George Will cogently writes about “The Fed’s not-so-golden rule.” Readers should just look there. Quantitative easing, and it is nonsensically termed, is simply about the ever-cheapening of the value of the dollar, now over many decades. It does not buy much, and companies with pricing power will always go to market for more dollars, if that is the legal tender.
Expect gasoline prices to exceed $5 per gallon very soon. The Consumer Price Index conveniently drops energy and food prices from its compilation to mask inflation. The ZIRP is a pernicious threat to the economy.
David R. Conners