Actually, if you look at the Carter years and compare it to now, it looks to me like we're headed for stagflation and that is a very well known territory to some of us that lived through those times.....
Actually, if you look at the Carter years and compare it to now, it looks to me like we're headed for stagflation and that is a very well known territory to some of us that lived through those times.....
I remember them too. But the difference that I'm pointing out is that we're dealing with LOW interest rates. I actually remember my mother having a number of CDs in banks that were earning more than 18% interest rates. CDs were actually pretty good places to park money back then. Today a CD will typically pay less than 4%, and every drop in interest rates hurts savers more and more. The low interest rates seem to be designed to spur borrowing and spending, and to discourage saving and investment. But as I mentioned, many lenders will be more hesitant to loan the money out.
Mark
I agree. Everything is pointing to stagflation.
Weak dollar + high commodity costs = hidden inflation
Hidden inflation = less money for the consumer to spend = recession
Recession + weak dollar + high commodity costs = 1970’s redux.
The only thing missing is the high interest rates. But that’ll come, for it’s the only thing left in our arsenal to boost the value of the dollar.
And if we boost the value of the dollar, then the commodity prices come down, paving the way for consumers to spend more, as they now can buy goods at a ‘cheaper’ price.
That is, if they have a job...