Sunday, December 16, 2018

Alan Greenspan Warns: Stagflation is Coming

Stagflation is a period when you have high price inflation, a sluggish economy and high unemployment.

The phenomena was prominent in the 1970s.

Investopedia informs:
Stagflation happened in the United States during the 1970s, when the country underwent a recession that saw five quarters of negative GDP growth. Inflation nearly tripled in 1973 and hit double digits between 1974 and 1975, and unemployment hit 9% by May 1975.
The period made mincemeat out of the so-called Phillips Curve, a mainstream Keynesian economic view that there is a direct tradeoff between accelerating price inflation and climbing unemployment.

In the below clip, former Federal Reserve Board chairman Alan Greenspan tells Maria Bartiromo of Fox News that he expects stagflation.

Greenspan's view is not that much different from my view which I detail the EPJ Daily Alert. However, I believe that the price inflation and weakening economy could be much more severe than Greenspan does.


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