Unfortunately, we live in a world where people in positions of authority selfishly think only about themselves. Consequently, many in these types of positions are easily swayed by power and money.  Decisions aren’t necessarily for the benefit of the majority but most often for personal gain or the benefit of the influencer.

I decided to wait until after the FOMC decision on interest rates in America to describe the impact of their decision. The fallout seemed to have been muted after The Federal Reserve did raise rates 50 basis points, demonstrating they will continue to be aggressive in their fight against inflation. The goal is to drive inflation toward the acceptable range of 2%. Fed Funds rate presently (4-4.25%).

From my perspective, the quickest way to bring down inflation is by severely reducing the cost of the variables within the calculation. A key variable is the price of Oil. It is the most influential variable within. Therefore to get a result, the means is to flood the market with the commodity itself. This was accomplished by releasing the strategic Oil reserves, providing a temporary solution. The result was definitely a reduction in gasoline and Oil products overall. The question remains, was this done deliberately to support the actions of the Central Bank, by providing justification that the course of action taken is the best strategy for the fight against inflation?

This morning the European Central Bank also followed the same course of action, increasing interest rates by 50 basis points. The conversation continued with an affirmation that rate hikes will continue aggressively moving forward. Most likely to the detriment of the economy in general.

In reality, the accumulating increases devastate individuals on fixed incomes and salaries. As the cost of living also increases, people’s ability to pay also becomes taxing. The brunt of the added burden will be exposed once term mortgages end and renewals need to be renegotiated. The lack of quality work could also compound the situation forcing people to walk away from their investments, in turn accepting Government assistance. Could this become a reality whereby millions become impoverished and then the Governments of the World offer a solution?  Universal Income and a place to live. It sounds too familiar, “You will own nothing and be happy”.