[dragontamer]

> What kept inflation at 2% was a perfect historical moment in global growth/globalization that will not come again in our lifetimes.

If that "perfectly balanced 2% inflation" was pushed away with say, the central bank raising interest rates, what do you think would have happened?

We would have had deflation. Which is incredibly dangerous. Its not even a question, all of that inflationary pressure (low rates, QE1, QE2, QE3, etc. etc.) the central bank pushed from 2010 through 2019 was just barely able to sustain 2% inflation... the target.

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We probably could have afforded to rock the boat a bit more than we did those 10 years though.

[scottLobster]

A target chosen completely arbitrarily. Obviously deflation is playing with fire, but I see no reason why something closer to 0% inflation would have been an issue. Maybe even a quarter or two of deflation wouldn't have killed things. Things more or less cost the same year to year? People would be less incentivized to invest unless they have an idea they think will have a return that beats a savings account? Cool, maybe slow, steady growth and savings could have stored up a decent cash pile for... oh, I don't know, a pandemic and a full blown war amongst (by world standards) wealthy nations? Those fun unforeseen events that I guess those in power (in the west at least) arrogantly deemed were no longer possible?

There are probably literally a thousand proverbs in a thousand languages, probably more in languages lost to time, that amount of some version of "when times are good, prepare for the bad". This is fundamental human knowledge.

I guess we generally agree, I just get frustrated when institutions like the fed, who are politically insulated by design, fail to appreciate their responsibility or make full use of their privileged position. Seems like for most of the last ten years leadership in general was conflict-avoidant to a fault.