h inflation times many of these people get out of these types of investments and go to less interest rate sensitive investments. Some examples of these are precious metals, real estate, and art. On the contrary, those individuals who do not have investments that are tied to interest rates are generally not hurt very much or at all. The majority of the population does not have interest sensitive investments. Many times their only investment is their home. Greider gives the example that generally in inflationary times individual incomes go up with inflation. Therefore, their spending power is not affected by increases in the general price level. Most of these people also own their own home and have fixed rate mortgages. Because of this their payments do not go up. This means that their mortgage payment, generally one of their largest expenses, goes down in real terms. Most individuals do not understand this; they only see increases in prices and because things cost more, they believe that they are worse off. Many times exactly the opposite is true.Inflation was one of the main reasons that President Carter found himself with a lackluster approval rating. He knew that something must be done, and finally made the choice to appoint Paul Volcker as the Federal Reserve Chairman. By selecting Volcker, President Carter received a lot of criticism from advisers. Many said that Volcker would not be a team player the way that Bill Miller, the previous Fed Chairman, had been. This was very important to these advisers. They saw a Fed Chairman who was a puppet to the President as being a puppet to them as well. Carter was able to see through this and understand the big picture. He understood that Paul Volcker was very qualified to take over the position. After all, he was the President of the New York Federal Reserve and had served as the Treasury Under Secretary for Monetary Affairs for Richard Nixon. Volcker was also very strong...
