Does attacking the independence of the Federal Reserve lead to inflation?

This is what Jamie Dimon, CEO of JPMorgan, recently said.

But the most important question is not political… but structural:

Is inflation in the modern monetary system a mistake? Or a necessity?

In fact, to understand the issue, we must go back to the very foundation of the financial system itself.

In the current monetary system, money is not created out of thin air, nor does the state print it directly.
Money is primarily created by commercial banks when they extend loans.

Each loan = new money
And each money = a debt owed to someone

And here lies the core dilemma:

> Banks lend only the principal, but they demand repayment of the principal + interest.

So where does the interest come from?

The only possible answer:
🔹 From continuous credit expansion
🔹 That is, from sustained growth in the money supply

And from here arises the structural need for low and continuous inflation.

Not because central banks “like inflation,”
But because the absence of inflation in a debt-based system inevitably leads to deflation and mass insolvency.

When the growth of the money supply stops:
- The real value of debt increases
- The repayment burden intensifies
- Investments decline
- The risk of default rises
- And the state itself enters a financial crisis

For this very reason, central banks do not target “zero inflation,”
But a low and stable inflation (around 2%).

Not to erode purchasing power,
But to avoid deflation,
To maintain debt sustainability,
And to keep the economy wheel turning.

As for the claim that the Fed “creates inflation,” the more accurate statement is:

> The Fed does not create inflation,
> But manages the conditions for its occurrence or suppression.

True inflation arises from:
- Excessive credit expansion
- Unrestrained fiscal policies
- Supply shocks
- Structural imbalances

And the role of the central bank is balancing, not igniting.

In summary:
🔹 The modern monetary system cannot function without low inflation
🔹 Debt needs nominal growth to continue
🔹 The absence of inflation is more dangerous than moderate inflation
🔹 And the independence of the central bank is not a luxury… but a safety valve

This is not a call for inflation,
But an explanation of why it is impossible for it to be zero in a credit-based system.

#السياسة_النقدية ‎#Federal Reserve #التضخم Central Banks #الاقتصاد_الكلّي ‎#