The Fed Has Been Running a Decades-Long Experiment on Your Wallet and You Are the Lab Rat

Sixty-Eight Months. Let That Sink In.

Sixty-eight consecutive months where inflation has run above the Federal Reserve’s self-declared 2% target. We are currently at 4%. Double. And the financial media wants you to relax, wait for oil prices to dip, and trust that it will all sort itself out.

I am not going to tell you that. I am going to tell you the truth.

Prices do not go up fast and come down fast. That is not how this works. Once inflation embeds itself into the cost of food, rent, insurance, and energy, it stays there. What you are experiencing right now is the direct consequence of mispriced money, a game the Federal Reserve has been running for decades, and everyday Americans are always the ones left holding the bag.

Every Bubble. Every Single One.

I want you to hear this clearly. Every major financial bubble in modern American history traces directly back to Federal Reserve policy. This is not conspiracy. This is documented history.

• The dot-com bubble: Between 1995 and 2000, the Fed expanded the money supply by 40%. Cheap money poured into NASDAQ stocks, inflated companies with no earnings to absurd prices, and then collapsed, wiping out millions of retail investors.
• Long-Term Capital Management in 1998: The Fed cuts rates after the Russian default crisis. Nobel Prize winners blow up a hedge fund making reckless bets. The Fed rides in with cheap money to clean it up. Regular people learn nothing because nobody told them what actually happened.
• The COVID-era real estate deals: Cheap money, cheap debt, aggressive valuations. Now, with rates higher, those deals are underwater and the investors who got sold on the dream are finding out the hard way.

Ludwig von Mises explained this mechanism clearly. Artificially low interest rates push capital into the wrong places. The boom looks great. Then reality arrives.

Politicians Making It Worse

And while all of this is happening, politicians are out there demanding the lowest interest rates in the world, as if cheap money is some kind of patriotic right. We are sitting on nearly $41 trillion in debt. The supply of bonds being issued to fund that debt is massive. Long-term rates are driven by supply and demand, not just Fed announcements. The math is not complicated, but apparently it is too inconvenient to discuss honestly.

Inflation is a tax. It is the most regressive tax that exists because it hits people with the least savings and the least financial flexibility the hardest. The Fed’s 2% target is literally a plan to erode your purchasing power on a schedule. At 4%, they are ahead of schedule.

The Question Nobody in the Room Will Answer

Here is what I cannot get a straight answer on. The Fed raises interest rates to fight inflation. At the same time, the Fed continues quantitative easing, which means printing money and expanding the money supply. How exactly do those two actions work together to solve the problem? They do not. One foot on the gas, one foot on the brake.

What you need to understand right now:

• Real estate deals from the COVID era built on cheap money assumptions are cracking under higher rate pressure.
• Your savings account is likely still losing real purchasing power every month.
• The Fed’s next move, hold, raise, or cut, will have ripple effects across every asset class you own.
• Nobody in the financial establishment has a strong incentive to explain any of this clearly to you.

The Pattern Has a Name

Easy money. Bubble. Pop. More easy money. Repeat. The only thing that changes is the size of the damage. We are deeper in debt, more leveraged as an economy, and more dependent on Fed intervention than at any point in history. The experiment keeps running. And you, the consumer, the saver, the retiree, you are the one funding it.