"While the U.S. economy actually experienced a falling general price level over the past 12 months, the annualized CPI inflation rate ran at about 4.4 percent during the past three months. That's pretty darn hot. Looking ahead, even with an under-performing economic recovery, high inflation can in no way be ruled out. Since inflation ultimately is about too much money chasing too few goods, and given the historic increase in the money supply over the past year, a bout of stagflation - that is, slow growth and relatively high inflation - remains a serious risk."
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Wednesday, September 16, 2009
SBE Economist on Inflation Data
"While the U.S. economy actually experienced a falling general price level over the past 12 months, the annualized CPI inflation rate ran at about 4.4 percent during the past three months. That's pretty darn hot. Looking ahead, even with an under-performing economic recovery, high inflation can in no way be ruled out. Since inflation ultimately is about too much money chasing too few goods, and given the historic increase in the money supply over the past year, a bout of stagflation - that is, slow growth and relatively high inflation - remains a serious risk."
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