Disinflation and Deflation

The Fed, after its FOMC meeting, said it will discourage inflationary pressure in line with its mandate.

While deflation is the larger threat, the committee recognizes the potential for inflation. In a Keynesian environment, this kind of potential volatility indicates the capital, despite being copiously added to "accommodate" growth, is too consolidated.

If disinflation, rather than deflation, was the current trend, the Fed's FOMC meetings would not be so noteworthy and the meetings themselves more about how the wife and kids are doing, and maybe what you had for breakfast. Instead, we hang on every word to detect the probable tension and volatility between inflationary and deflationary trends. Unfortunately the fate of millions of Americans hangs in the balance--hardly the pluralistic model of self-determination.

The more probability of disinflation, the less probability of deflation. Why is it then the Fed is always preoccupied with the probability of inflation or deflation, but not disinflation?

Disinflation is the result of ensuring a free and unconsolidated marketplace. The less consolidated it is, the more open it is.

Since disinflation is the result of an open market, it seems like the Federal Open Market Committee would be more preoccupied with producing a disinflationary effect. The Federal Reserve, however, is more interested in controlling the instability than effecting stability.

The instability is conserved to the practical effect of, ironically, closing the market enough to minimize the probability (the general benefit) of disinflation.

Disinflation has a commonwealth benefit. Since providing for the commonwealth is at the expense of consolidation and the benefit it provides (recessionary consolidation of the wealth like we are experiencing now), the Fed tends to resist disinflation and support inflationary tendencies (to the extent of its mandate) that are the result of consolidation. The way it is now, for example, the deflationary threat is so pernicious that inflation is an acceptable alternative, but only if disinflation is not a probability.

The best way to avoid deflation and inflation is to try and prevent it. Instead, the Fed, and the regulatory authority generally, "accommodates" the instability because it arbitrages (arbitrates) value in zero-sum to create capital gains by hedging the risk the instability represents.

For example, if ETF's collapse under the weight of its double-hedge creation vehicles, it will be the Fed (the taxpayer) to bail it out. Since the profits generated up to the point of collapse are not at risk of being retributed to a resolution, more money is added to the supply (accommodative Keynesianism). The risk of deflation is traded for inflation to yield a stagflationary effect.

The market is being rigged (hedge funded) so the unhedged risk (main street) is left holding the bag (the detriment in a zero-sum proportion). Since this occurs with the highest order of intent (the consequences are not ontologically unintended or unforeseen), the reward is retributively valued and liable for the risk assigned to the risk-bearer without consent in zero-sum.

Assigning, or transferring, risk to unconsenting parties is not a sophisticated business strategy, it is an ignoble, cowardly criminal act every bit worthy of prosecution to conserve the openness, the credibility, the virtue, of a free market. The credibility of a free-market legitimacy must be prosecuted to the fullest extent or it will perish leaving nothing but the tyranny it would otherwise prevent if allowed to obtain with a disinflationary effect.

Transferring risk is a legitimate business practice for controlling costs, not for merely gaining capital derived in the dark behind closed doors to manage the risk into a deflationary or stagflationary effect.

The Fed, for example, is keeping the market open for practices that close it. Main Street should consider that completely unacceptable, and there is a growing popular movement to open the market in a meaningfully visible (accountable) and unobstructed (unconsolidated) way.

A free and unconsolidated marketplace is openly accountable with few if any barriers to entry--it is disinflationary.

It's time for controlling inflation by the most direct means possible and prevent the production of profits without the prior consent of our full, free-and-open participation as mandated by The Constitution of the United States!