“The Fed’s Dim Chances of Getting Inflation Under Control”, David Ranson, HCWE & Co.

David Osman of IRF is joined by David Ranson, the president of HCWE & Co. for the latest episode of the IRF Podcast. Here David Ranson discusses the misunderstood causes of inflation and the consequent undermining of sound money as a store value. He highlights the importance of the quality of money, as opposed to the quantity. 

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David also explains why the 30-year forward price of gold is the best way to assess the quality of money and he argues that the current burst of inflation was not generally expected because the cause has not been diagnosed correctly. His empirical analysis has major implications for the conduct of monetary policy and the impact of those central bank policies on an economy’s performance.

 

David points out that the historical evidence does not support the belief that raising interest rates to control inflation is effective. He concludes that the present policies being pursued by the US Federal Reserve and other central banks around the world are not only harmful, but also ineffective when it comes to preventing inflation in the medium to longer run. Consequently, he is very bearish about inflation worldwide.

 

David Ranson does not expect a recession this year, but he does expect US economic growth to remain very slow. He foresees waves of stubborn inflation in the years ahead, with interest rates rising erratically, if the conduct of US monetary policy does not change. David argues that to control inflation the general public must have confidence that the value of the money unit will be preserved. Hence, he believes that the floating US dollar needs to be anchored to something stable, such as gold.

 

David has a Doctorate in Business Economics from the University of Chicago Business School.

 

HCWE & Co. has a clientele of institutional investors, hedge funds and family offices throughout North America and Europe. Over the years, HCWE & Co. has demonstrated a successful track record, anticipating major economic and asset market moves in both the US and elsewhere.