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Why Don't They Just Say It: Stagflation!



June 12, 2008 – Comments (8)

Economic growth trickling down. Prices screaming up. That's the definition o' stagflation, but few seem to be willing to acknowledge it, let alone say it.

Well, certain loudmouths have been saying it for a while now.

At least it seems some at the Fed aren't willing to let it slide. Recessions are bad enough without ineffective "liquidity" injections pushing up prices without increasing the kind of productivity-increasing investments that constitute the basis for real, healthy economic growth.

Maybe, just maybe, raising rates will entice some of that hot money out of speculating on non-value-adding commodities. Maybe, just maybe, if people aren't trying to escape the expectations of money losing all its value, they'll put it to better use, rather than simply hoarding what they think will be scarce.

8 Comments – Post Your Own

#1) On June 12, 2008 at 3:23 PM, EScroogeJr (< 20) wrote:

Precisely. When M3 is up 20%, the Fed forces you to be an investor whther you like it or not.

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#2) On June 12, 2008 at 3:34 PM, Hoglum (53.39) wrote:

Maybe they don't say it because it sounds too much like a deer fart.

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#3) On June 12, 2008 at 3:43 PM, ATWDLimited (< 20) wrote:

OK, if you insist, but I propose that they will not call it what it is because than they have to admit, since 2002 we have had crappy growth, barley outpacing inflation, and was all just an artificial bubble, like the 90's. How could they justify liquidity injections and bailouts if the sheep of America knew that the Fed was playing a game and that they are pulling strings.

At any rate, we are in trouble,

Raise interest rates= more housing crisis, less business expansion, more unemployment

Lower rates= more inflation, weak dollar, low growth stagflation debt bomb explodes debt bomb gets reset  to 5 years from now

Keep the same= dollar losses value, bubble forms, debt bomb expands

Just look at how much they played around, they jacked rates up, they lowered them, they jack them up they lower them, at the same time liquidity explodes, inflation accelerates, real growth diminishes and we are full of debt. 

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#4) On June 12, 2008 at 4:07 PM, TDRH (97.10) wrote:

Makes you wonder why anyone would want to be president in this business cycle.   Whoever is elected will be run out on a rail in 4 years or less similar to President Carter.

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#5) On June 12, 2008 at 4:13 PM, Zanibel17 (92.92) wrote:


TMFBent, your post is great, but I'm only recommending it so everyone will read Hoglum's retort.



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#6) On June 12, 2008 at 5:06 PM, FleaBagger (27.50) wrote:

This is all relatively easy to cure. Market freedom unburdened by high government spending does wonders for an economy. There would be very little inflation if the government didn't need it to pay its debt obligations, and the government wouldn't need it to pay its debt obligations if it didn't waste so much money on entitlement programs that discourage people from working and investing, as well as pork and expensive, needless regulations. Debt/inflation is just the politically feasible way of taxing the economy to pay for popular government programs.

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#7) On June 12, 2008 at 5:13 PM, eldemonio (97.99) wrote:

Stagnation is not the word, that's too played out.  I posted in January about Recflation, possible Inflession.  I settled on Inflession because people kept pronouncing Recflation with a hard "c" sound and it made me think of dirty things.


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#8) On June 23, 2008 at 1:26 AM, hansthered0 (< 20) wrote:


Like sex with a deer?

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