Why No Inflation?
middle-class and lower-class, working Americans suffer from low pay (the
average real wage has declined steadily) and from joblessness, corporations are
making large profits, and the stock market has risen to record levels. Globalization and the housing crash brought
us to this point, but the current dilemma is the direct result of Obama
Administration economic policies.
The Federal Reserve is pumping hundreds of billions of dollars into the economy by buying Treasury Bonds ($2 trillion, so far). Ordinarily this would be causing high and rising inflation here at home, and many of us have taken steps to protect ourselves from a hyperinflation that, so far, has failed to develop. Inflation is higher than admitted by the government, but not anywhere what we would have expected. The question is, why not? An explanation is in this excerpt below from RealClearMarkets:
“While Washington's latest figures show a year-over-year CPI increase of just 1.2%, the private service ShadowStats, which recalculates the data along the lines that the government used to, finds that real consumer inflation is closer to 9%.
My guess is the true number lies somewhere in between, but that it would be much higher were the
It's a complicated relationship, but the end result is that inflation created in the
This cannot continue indefinitely, but right now we cannot predict when the day of reckoning will come. Remember how the market tanked when the Fed simply wondered aloud about how and when they should start tapering off the Quantitative Easing? More on this in future articles.