What Bullard meant by "a new surprise...that we can't anticipate...
but we would have even more inflation" is hyper-inflation , fait
money's Achille's heel caused by excessive monetary liquidity that
can be reversed only by raising interest rates.
Raising rates today, however, is extremely dangerous. Global
economies, burdened with almost $130 trillion of debt, are
vulnerable to any slowdown. When economies slow, so does the
ability to repay debt. When growth stops, the bankers' daisy-chain
of debt unravels, bonds default and economies will collapse.
On December 19th, after the Fed had raised interest rates four
times in 2022, David Lynch wrote in the Washington Post:
"...even after nine months of repeated Fed rate hikes, inflation-
adjusted interest rates are still negative. Karen Petrou, managing
partner of Federal Financial Analytics, said the stress will grow once
rates move higher and really begin to slow the economy. After
Thursday's increase, the Fed now expects rates to peak next year
above 5 percent and to remain there through 2023..."It's a very
tricky situation. As rates rise, even in a mild recession, then it gets
ugly," she said. "
"The Federal Reserve has not established a formal inflation target,
but policymakers generally believe that an acceptable inflation rate
is around 2 percent." - Board of Governors, Federal Reserve System
Should the Fed keep raising interest rates to achieve 2% inflation, it
will trigger a collapse of stock, bond and real estate markets that
will make the Great Depression seem like an amuse-bouche
A GREAT WAVE OF INFLATION, THE COLLAPSE OF CAPITALISM AND
THE EMERGENCE OF A NEW PARADIGM
In September 2008, in my article Gold & The Collapse of Paper
Money, I referred to Professor David Hackett Fischer's The Great
Wave, Price Revolutions and the Rhythm of History (Oxford
University Press 1996):
According to Professor Fischer, throughout history periods of social
stability are interrupted by waves of rising prices. These great
inflationary waves are accompanied by unexpected disasters,
extreme social upheaval and cause the collapse of the existing era;
clearing the way for a new more advanced age.
"In each wave of rising prices: ...Food and fuel led the upward
movement. Manufactured goods and services lagged behind. These
patterns indicated that the prime mover was excess aggregate
demand, generated by an acceleration of population growth, or by
rising living standards, or both."