Almonty Industries CEO has stated that the Federal Reserve could need to wait 10 years before inflation is under control. If they don’t act quickly and stop spending money, it will take them 10 years. “And they need to raise rates. That’s the only tool that works,” he said.
Federal Reserve Might Need to Take Decades to Bring Inflation under Control
Almonty Industries CEO Lewis Black spoke to Kitco News about the U.S. economic state and the rise in inflation during a recent interview.
Almonty, a multinational mining company, focuses on tungsten exploration and mining. Black brings over 15 years’ experience to the tungsten mining business. Recently, he explained to me that the main use of tungsten in the battery for electric vehicles is. “Tungsten is used in anodes and cathodes in batteries, helping vehicles charge quicker,” he said.
The executive acknowledged that Russia’s invasion of Ukraine is directly responsible for the current inflation spike, but he also pointed out that commodities had already reached record levels before Russia invaded Ukraine.
“We already had disruptions, and governments worldwide have printed so much money. When you inflict on the economy so much money, it creates inflation,” Black explained, adding:
Putin is the current fashion. Some commodities also have risen on the backs of the invasion. Some commodities were at or close to their all-time highs prior to the invasion.
“Inflation is going to ultimately continue. Recognizing your problem is the first step in recovery. And until that happens, things will continue to spiral out of control,” he stressed.
The chairman of the Federal Reserve, Jerome Powell, admitted Monday that “inflation is much too high.” He stated that the Fed “will take the necessary steps to ensure a return to price stability,” adding that it will raise the federal funds rate by more than 25 basis points if appropriate.
Black emphasized:
Inflation must be controlled. You could lose a decade if it spirals out of control. It is imperative to act now — stop spending money and reduce the amount of money you circulate as a government.
“And they need to raise rates. That’s the only tool that works,” he further suggested.
The Almonty executive added, “There is a real risk of shortages in the short term due to exacerbated disruption to the supply chain.”
“Supply chain disruption reduces the availability of products. You can also reduce consumer spending by reducing the supply of goods, which in turn helps to maintain inflation. If you can’t buy it, you can’t spend it,” he detailed. “And that involuntarily restricts the flow of money. That may stabilize or at least slow the inflation rate quite dramatically.”
Slower growth will result from supply shortages. “The economy is going to take a back seat. These factors will help slow inflation, but you will see this go into 2023,” Black concluded.
Do you estimate how long it will take for the Federal Reserve in order to control inflation? Please leave your comments below.
Credits for the imageShutterstock. Pixabay. Wiki Commons
DisclaimerThe information contained in this article is intended to be informative. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com doesn’t offer investment, tax or legal advice. The author and the company are not responsible for any loss or damage caused by the content or use of any goods, services, or information mentioned in the article.