The Inflation Will Come
Jun 10, 2009 Political
Arthur B. Laffer has an article up at the Wall Street Journal (one of the only papers with increased circulation) where he discusses the inflation and high interest rates that will most assuredly come as a result of the out of control spending and the printing of more and more money. Laffer does a great job of going through the issues and the consequences. He has this bit of frightening information:
It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture. WSJ
There are quite a few people who say that there will be little or no inflation and some of them comment here. They seem to have a problem grasping the concept that actions have consequences and the consequences of out of control spending will be grave indeed.
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Tags: arthur laffer, inflation, interest rates