"Entrepreneurs, small businesses, investors and consumers should not rest easy with the latest report on inflation, or with Federal Reserve monetary policy. While the consumer price index rose by only 0.1% in December, CPI inflation has been creeping higher over the past year. From December 2008 to December 2009, CPI inflation ran at 2.7%. Over the last six months, annualized CPI inflation registered 2.9%, and over the most recent three months, it came in at 3.3%.
"And this occurred even though the economy remained incredibly weak, and job losses continued. Looking ahead, the worst case scenario for the U.S. economy would be stagflation - recession or slow growth combined with higher inflation. Unfortunately, with the Federal Reserve opening the monetary floodgates since September 2008, and the Obama administration and Congress pushing higher taxes and increased regulation, the table is set for stagflation."
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