Monday, August 29, 2016

Larry Summers Has No Fear of Developing Price Inflation

Larry Summers has a piece out at the Finacial Times where he says the Federal Reserve is moving too quickly on raising interest rates:
 [T]o say that the case for a rate increase has strengthened is not to say that it has reached the point of being persuasive.
Even if the September employment report is strong, I do not see a case for a rate increase in that month.
I think he is off and this but what I really want to note for future reference is when he writes this:
There is no imminent danger of repeating the 1970s experience where inflation expectations ratcheted up leading to stagflation.
The man clearly has no clue as to how fast inflation expectations can ratchet up. In recent issues of the EPJ Daily Alert, I have been pointing out various data points that suggest price inflation is brewing just beneath the surface.

Let's pull this post up one year from today on August 29, 2017 and see how it looks.

I am re-posting and scheduling it to appear at EPJ again on that date.



  1. I have a feeling Summers will end up looking like a fool. It's going to be interesting.

  2. It's an election year. Lots of foolish things are said.

  3. The crony class, that Larry Summers is part of, are not concerned with inflation because most of their wealth comes from assets which increase their wealth in times of inflation. The majority of us who depend on regular income get hosed.

  4. This should be interesting. I'll be here a year from now.