NO Fear...Obama is near.
Typically, that slowdown should slow inflation as well — the second part of the diagnosis — but prices are still marching higher.
The truth is this whole thing is a huge tax on the affluent. CD rates are hitting bottom, but loan interest rates have actually gone up. Its really about replenishing the bank’s coffers so the Government doesn’t have to bail ‘em out.
Typically, that slowdown should slow inflation as well — the second part of the diagnosis — but prices are still marching higher.
The truth is this whole thing is a huge tax on the affluent. CD rates are hitting bottom, but loan interest rates have actually gone up. Its really about replenishing the bank’s coffers so the Government doesn’t have to bail ‘em out.
"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."~~Alan Greenspan, February 22, 2004
“The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions.”~~Alan Greenspan, May 2005
"We're not about to go into a situation where (real estate) prices will go down. There is no evidence home prices are going to collapse."~~Alan Greenspan, May 21, 2006
“The damage from the subprime market has been largely contained. Fortunately, the financial system and the economy are strong enough to weather this storm.”~~Richard Fisher, Federal Reserve Bank of Dallas President, Apr 4, 2007
"All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."~~Fed Chairman Ben Bernanke, May 17, 2007
It still boggles my mind how you can have inflation during a recession, but then either asset prices must fall or costs & wages must inflate.
It sure feels like the 70s are right around the corner. Not looking forward to it...
The reason stagflation could exist was the oil price fixing by OPEC. OPEC does not have the same near monopoly powers today & the price of oil will rise or fall depending on demand. If the economy shrinks (the “stag” part) demand for energy will fall, and the price will drop — thus reducing the “flation” part of stagflation.
One significant change — Canada’s oil sands have reserves at least as large as those of Saudi Arabia.
Another change — the N. American economy produces at least twice the GDP per unit of energy used, as it did in the early 1980’s. The economy is simply not as vulnerable to the price of oil.
IMHO, the talk of “stagflation” is nothing more than MSM know-nothings talking doom and gloom to help their Democrat fellow-travellers in the upcoming elections.
The economy is being talked down by the MSM and every leftist organization just as it always is before an election where the incumbent is a Republican.
With global warming having wiped out the crops for 1.5 billion Chinese, why should anybody be surprised at rising food prices?