Posted on 06/16/2006 8:23:26 AM PDT by Hydroshock
It's not stagflation, but what is it?
Rising inflation, rising unemployment and slowing growth in the 1970s created stagflation, a phenomenon that led to double-digit interest rates in the early 1980s as the U.S. Federal Reserve tried to fix the damage made by loose monetary policies in the previous decade.
Then as now, there was unrest in the Middle East and an oil shock that drove energy prices sharply higher. There were also steep U.S. budget deficits. The dollar was falling and commodity prices were rising.
But economists say it is unlikely that the economy will slump into the painful inflationary days of the late 1970s and early '80s. Globalization puts downward pressure on prices because companies have to compete more aggressively. Also, the Fed seems determined not to repeat the lessons of the '70s.
"If we're headed toward stagflation, it's very low-altitude stagflation," says Mark Vitner, chief economist at Wachovia (nyse: WB - news - people ). "That's the way a pessimist would look at the world in a Goldilocks economy."
So it's not too hot, it's not too cold, it's just right?
(Excerpt) Read more at forbes.com ...
Worst economy since Herbert Hoover!
It's the worst economy since Hoover!!!
Hydroshock, why do you try so hard to post evidence that the US economy is in the dumper?
5% unemployment and 4% inflation equates to stagflation?
I wonder if this author was alive at that time or is cognoscente of what this term really meant to embody?
I do not think it is in the dump, I think the chances are good it is heading there. We will know by this time next year. With over 1 Trillion in arms resetting in the next two years it will suck alot of disposable income from the economy, that and cause a lot of foreclosures.
I don't get the "stag" part.
Hydroshock must have some interest in vulture funds--funds set up to capitalize on falling real estate prices.
No, I have moved all my money as of yesterday to money markets. I think a down turn is coming.
Let me ask you one question, if I may. Reading what is in the news about housing and the economy as I have. Would you now be looking into buying a new house, either as an investment or moving up to a larger residence? Yes thsi would mean encuring more debt. Or would you stand pat for at least 6 months to see what shacks out?
Stagflation was a combination of the words "stagnant" and "inflation". The economy was stagnant, but inflation was high, ergo that word.
You know how the MSM reported the low unemployment rate? "Hiring slows." That's right; employers were running out of unemployed people to hire because the unemployment rate was so low, and the MSM tried to cast this as vast huddled masses being unable to find jobs. Complete joke.
Depends on the market. There is no such thing as THE housing market. They can be very different in only 5 miles... So, in a good area, yes... before interest rates rise further...
Un-F'ing believable where the MSM is today - They simply can't stand reality so they go about living in a pathetic make believe world (and try and spin it to the American public 24/7).
We are in the midsts of going on 5 years of economic expansion (over 5% last qtr), historically low interest rates, 4.6 % unemployment, less then 3.5% inflation, millions of new jobs in just the past 24 months alone, etc, etc,......Yet all the media can try and do is paint a negative picture out of "made up" negative news stories.
Admittedly, I haven't read all the housing and economic new as you....but what I read paints a low unemployment, stable economy, steady and perhaps rising interest rates. A 6-7% mortgage is a good deal, historically and empirically. Would I move--sure--if I could find a bigger house at a good price---but I ain't looking. Maybe when the economy collapses and the McMansions are sitting empty I will buy, but I ain't holding my breadth.
Liz is just a piker. If you want real doom and gloom, gotta post a Paul Craig Roberts article.
To each their own, but I would not do so even if I had just won 50 million in the lotery, was lighting my $25 cigar with a $100 bill (once just to say I did), drinking $100 a bottle bourbon as I was typing this. I think the market is about to drop.
It's what's calculated to bring in a Dem government once more so that the NWO can do even more to make us a third world rival.
A word had to be invented because the government and the MSM was unable to blame the inflation on the private sector and economic growth as they usually do. The economics of that time period remain a mystery to them to this day, but they are certain that Paul Volcker fixed it by wrecking the economy early in Reagan's first term.
Isn't it sort of obvious that Hydroshock is really ex-texan? Or am I the only one that thinks so?
I think so. Ex-texan still posts, but I think he's double dipping with his new moniker.
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