Susiepolls2008


central banks can cause inflation by permitting excessive growth of the money supply,[8] and the government can cause stagnation by excessive regulation of goods markets and labor markets;[9] together, these factors can cause stagflation. Both types of explanations are offered in analyses of the global stagflation of the 1970s: it began with a huge rise in oil prices, but then continued as central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway wage-price spiral.

Stagflation has generally proven to be difficult and costly to eradicate once it gets started.

Unfortunately, higher inflation is coming from every direction you care to look. Normally, the Federal Reserve and the European Central Bank would move to stomp out inflation by raising interest rates. Now, thanks to a weakening U.S. economy and turmoil in the debt markets, the Fed is lowering interest rates instead, and both banks are flooding the financial markets with short-term cash.

China, Russia and other emerging-market economies determined to keep their currencies from gaining against the dollar are creating money to buy dollars, inflating their own currencies, and that money is fueling booms in stock and real-estate markets. Inflation hit 6.9% in China in November, for example. And these countries are exporting some of their inflation in the form of higher prices for developed-world customers such as Wal-Mart Stores (WMT, news, msgs). Demand from these fast-growing economies for raw materials is driving up the price of coal, iron ore, corn, wheat, oil — just about every commodity you can name. A falling U.S. dollar is driving up the cost of everything the country imports, from oil to children’s toys.

Normally, the Federal Reserve could count on a slowing economy to take a bit of wind out of inflation’s sails. But many of the current causes of inflation aren’t linked to the U.S. economy. We could get inflation and slower growth — the definition of stagflation.

http://articles.moneycentral.msn.com/Investing/JubaksJournal/Is70sStyleStagflationComing.aspx

6 Responses to “Will Obama’s stimulus plan BRING BACK Jimmy Carter STYLED stagflation?”

1. WhiteHouse Watching on June 18th, 2009 5:56 am

   Yes only a Trillion times worse.

2. §§pecial Unicorn on June 19th, 2009 10:21 am

   Yes. It’s going to get much worse. Obama also doesn’t WANT it to get better.

3. Pluto C. Rat on June 19th, 2009 11:20 pm

   No wars with Carter.

   Or Clinton, for that matter.

   You’re so loquacious. Peace is so boring.

4. rundown73 on June 22nd, 2009 2:13 pm

   Earth to SusiePolls2008!
   We’ve been having stagflation for the last year or so. If you would take your head out of your political brain and take a look around you would notice that our country is in trouble. Maybe you could direct a little less effort on trying to pin the blame on the potential future actions of our president and a little more effort into actually trying to help solve the problem.

5. moo goo gai pan on June 23rd, 2009 2:29 am

   Obama’s ideas and plans will bring us to our knees faster than jimmy carters poison peanuts, but the good news is Obama will only be a one term president if he even lasts that long and his only accomplishment will be the certainty that an african american never runs for president again/man what a jackoff////

6. debra p on June 23rd, 2009 5:04 am

   Yes. But that will ultimately be a good thing.

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