Sunday, October 17, 2010

Disco Ben?

The New York Post gets it, they ran this pic of Ben Bernanke.

Serious inflation is on its way, if Bernanke attempts to print the way he indicates he is going to. It will surpass the near hyper-inflation of the 1970's disco years. NyPo writes:

Remember disco? Well, that wasn't the worst thing about the 1970s.

Stagflation spurred by dirt-cheap interest rates was the low point of the "Me Decade."...

"I fear that this policy could eventually lead to hy perinflation," said Boston University professor Laurence Kotlikoff, who warns that easy money policies have been going on for years.

The Fed, Kotlikoff states in his recent book, "Jimmy Stewart Is Dead," printed more money in an 18-month period, from January 2008 to June 2009, than "in the entire history of the republic." ...

Still, Kotlikoff said, the Fed is "just revving up" for what will be a quadrupling of the monetary base.

But he warns that will also eventually lead to a quadrupling of consumer prices.

"Yes, I worry about what the Fed is doing," agreed Arthur Laffer, a supply-side economist who persuaded President Reagan to cut marginal tax rates in the 1980s.

He said the nation could repeat the cheap money/stagflation mistakes of the 1970s. "The percent age increase in the monetary base is the largest in the past 50 years," according to Laffer.

That's similar to what happened back in the early 1970s, as the Fed pursued cheap money poli cies to help the na tion escape high un employment rates and weak growth...

William Fleckenstein, a money manager who wrote the book "Greenspan's Bubbles," is convinced that the Fed is about to repeat its mistakes.

"It's maddening to see the Fed cling to its belief that there never can be too much of a good thing when it comes to printing money," Fleckenstein recently wrote.

Economist Laffer argues that a repeat of the 1970s could be worse this time.

"To date, what's happened is potentially far more inflationary than were the monetary policies of the 1970s," Laffer warns. "It wasn't a pretty picture."

No comments:

Post a Comment