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Center on Wealth & Poverty

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The Only “Rules-Based” Monetary System That Has Ever Worked

_{Nathan Lewis
June 11, 2026
6
Currency}

Remember the Federal Reserve’s “2% Inflation Target”? It has been 63 consecutive months since that target has been met. In May, the official Consumer Price Index (which has been continually modified since the 1980s to make it look better) was 4.2% higher than a year earlier. But even if the Federal Reserve was able (har!) to meet this target, it smells suspiciously like a plan to gradually devalue the currency over time. This makes political sense — a cheaper currency benefits debtors, at least for as long as interest rates don’t reflect expectations of continual currency debasement. Since the government is the biggest debtor, and since a lot of voters are also big debtors, there is a kind of constant political wind toward cheapening the currency. This CPI …