Although former Treasury Secretary Larry Summers was not reported to have used the term “hyperinflation,” he was heading in that direction when speaking to an online conference of the Peterson Institute of International Finance on Oct. 13. As Bloomberg reported it, Summers warned: “We’re in more danger than we’ve been during my career of losing control of inflation in the U.S. We’ve gone even further towards losing it in Britain and I think we’re at some risk in Europe.”
Summers referenced the Wednesday Labor Department report that U.S. consumer prices rose by 5.4% in September year on year, the largest annual gain since 2008, saying that the data made him “more worried” about the inflation outlook.
“We have a generation of central bankers who are defining themselves by their wokeness. They’re defining themselves by how socially concerned they are,” he charged, contrasting today’s Fed officials downplaying the inflation risk to the warnings put out by former Fed chairs Arthur Burns and G. William Miller over annual price rises, often over 10%, in the 1970s.
Today’s central bankers are not preparing investors for the tough steps policy makers will probably have to take to rein in inflation, Summers warned. “If those actions come, they’re going to be very shocking and very painful in financial markets.”
The Bloomberg wire cited Fed adoption of maximum unemployment criteria—and “increasing discussion” among central bankers of incorporating climate change into their criteria, as their view of signs of “wokeness.”
