On Tue, Apr 26, 2011 at 5:35 PM, Gruss Gott <[email protected]> wrote:
> > Sam <[email protected]> wrote: > > > > Because the dollar is now worthless since we keep printing them. That > > raises fuel cost, driving, heating, shipping etc. > > This is a new thing. > > > > Please do explain that mechanism: how does the Fed's purchase of > treasury bonds raise "fuel, driving, heating, shipping, etc"? > > http://www.ibtimes.com/articles/138260/20110426/inflation-is-coming-to-america.htm Currently, Federal Reserve chairman Bernanke stubbornly and dangerously refuses to acknowledge the existence of inflation, chalking it up to a transitory spike in commodities prices. He has been lulled into a false sense of security by the low levels of the CPI index, which is kept in check by the high unemployment rate and the slack in the economy, as most economists will tell you. What many of them ignore, however, is just how fast inflation came suddenly seize the financial system once the unemployment rate is lowered and the slack in the economy disappears. The Weimar Republics hyperfinlation, for example, happened in just two short years. The period during which the Reichsbank lost control over inflation expectations was less than six months. Moreover, economists shouldnt be comforted by the low inflation in the mid 1990s and early 2000s period and use them as comparables to todays environment because it was driven by globalization. In 2011 and beyond, US trade partners are actually likely to be a source of upward pressure on inflation. US consumer inflation can easily spike in a matter of a few months once economic growth accelerates and the unemployment rate drops. It probably wont be hyperinflation (assuming the Fed stops at QE2), but inflation of 5 percent or more is quite possible. Alternatively, stagflation can occurred if the US dollars pace of depreciation rapidly accelerates before the unemployment rate is meaningfully lowered. Whatever the case, the Feds loose monetary policy will cause inflation in America in one form or ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:336863 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
