Why No Inflation?
While
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.
Labels: Obama, Wealth Inequality
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