http://research.stlouisfed.org/fred2/series/BASE
Please take a look at the unprecedented growth in the money supply. The printing presses are working overtime. What do we think is going to be the long term result of this madness? My prediction is massive inflation like the kind we had during the Carter years. Possibly in excess of 20%. Too many dollars chasing too few goods. Interest rates will follow and we will see the US government paying massive amounts of interest to keep on financing the multi trillion dollar debt that we are accumulating.
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2 comments:
Mark -
You are correct. We are setting the table for inflation. Precious metals are part of my portfolio and have been for years. That said, right now we have a much bigger problem - a worldwide deflationary spiral.
If you are concentrating on inflation, you have your eye on the wrong ball. To many dollars chasing too few goods? This would be disastrous if not for the fact that we have a ton of unused capacity. The economy is operating way below potential. We can increase production on a moments notice at low incremental expense.
With the world collapsing around us, we could use a little inflation - asset inflation. It would cure many sins. It would save the banks and many an underwater homeowner.
I agree - we will have some wicked inflation eventually. I hope it gets here soon, as that will indicate that we dodged the deflationary bullet. No Depression II.
Agreed. The massive inflation is in our future. Once it hits everyone will be crying about it because it is going to be huge!
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