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Volcker: Beware of Inflation

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September 20, 2011 – Comments (3) | RELATED TICKERS: GLD , SLV , CEF

Loose monetary policies designed to increase jobs demand and ultimately, economic growth, may open the way to just a little inflation.

Yet that can be a very dangerous thing, says Paul Volcker, former head of the Federal Reserve.

"So now we are beginning to hear murmurings about the possible invigorating effects of 'just a little inflation.' Perhaps 4 or 5 percent a year would be just the thing to deal with the overhang of debt and encourage the 'animal spirits' of business, or so the argument goes," Volcker writes in a Wall Street Journal piece.

The problem is rising inflation rates can come back to haunt present-day polices.

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3 Comments – Post Your Own

#1) On September 20, 2011 at 2:21 PM, ikkyu2 (99.46) wrote:

Well, he should know.

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#2) On September 20, 2011 at 3:27 PM, chk999 (99.99) wrote:

Volcker is one of the people that I pay the utmost attention to. He's forgotten more about policy effects than most people will ever know.

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#3) On September 20, 2011 at 5:47 PM, Frankydontfailme (21.71) wrote:

Thanks for this, very big deal. Get the feeling won't be reported on in MSM too much though....

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