Dear Mr. Powell,
We need to reassess the status of our economy, inflation, interest rates and recession. It is true that we do not make anything in the United States anymore and therefore supply has to come from overseas. It is also true that clogs and delays in the supply chain caused shortages in supply of goods for consumers here as a result. It is also true that massive borrowing and overspending by the government created demand for goods and services that was not available as a result of supply chain issues. We also know that it was new trade agreements made by our government that opened trade with China and other countries that sent all our manufacturing overseas. We must conclude, therefore, that our own government is responsible for the resulting inflation caused by this imbalance in supply and demand. Please note, however, that the supply chain appears to have opened up to some extent at least and, since supply is now more readily available, commodity prices of almost everything have declined substantially from their peaks.
Government borrowing and spending, though not yet under control, has been muted. Under the circumstances, consumer price index comparisons, year over year, for november, december and january will be substantially better than expected. This has not happened because of the increases in interest rates that you are employing. Interest rate increases dampen both supply and demand and will cause recession, but they do not correct imbalance between supply and demand. It is time to stop raising rates. Interest rates were too low for too long and we should maintain rates at some more normal level that is healthy for the economy. But inflation is moderating and interest rates are not the cure. The Federal Reserve did not cause inflation and the Federal Reserve can not cure it. Only the administration and Congress can cure inflation and make the necessary changes to improve our economy. Government borrowing and spending must stop. Everyone knows how inflationary it is. We must start bringing back manufacturing to this country so that we can have adequate supply of goods and services needed by consumers, and also for security reasons. Please note also that artificially high interest rates not only will destroy our economy but it is very damaging to the stock market as well.
Take a look at our dumb investment managers who are hiding in huge non growing companies and enabling government borrowing and taking investment away from growing companies that will help grow our economy. You may also notice that they are investing billions or even trillions in crypto currencies that drain capital needed by companies that produce goods and services for consumers. How many pounds of tomatoes and potatoes are produced when you buy a crypto coin which is nothing more than an entry on someone’s computer. By the way, deflation is not a bad thing. If prices of goods and services were going down and salaries were not, the consumer would certainly benefit. If we bring manufacturing jobs back to America, I believe you would see that we could have economic growth and deflation at the same time. This should be our goal.