Stagflation Coming
Economist Arthur Laffer explains what’s going to happen over the next few years:
We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.
…
It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture.
Why will this happen? You’ll have to read the whole thing to understand.
Subscribe to blog feed.
June 15th, 2009 at 8:10 pm
But….but….what about my haggis?
And what about my lobster?
I want, nay, I DEMAND my RED LOBSTER BAILOUT!!!
June 15th, 2009 at 8:34 pm
Laffer’s always been an optimist.
June 15th, 2009 at 10:19 pm
Laffer’s always been an optimist.
LOL. Scary thought isn’t it.
June 16th, 2009 at 7:03 am
These gloomy economic predictions do not coincide with Oak Leaf’s optimistic outlook. Who are we to believe? Should I side with the far-left Barack Obama psychophat Oak Leaf, or should I believe a conservative economist who’s been proven right several times in the past?
More importantly, why does Poli continue to allow conflicting world views to be expressed on his site? Lori Byrd, Alexander McClure, and DJ Drummond were unceromoniuosly kicked off of this site because they disagreed with Poli on immigration. Why isn’t Oak Leaf given the same treatment for expressing his pro-Obama, extremely liberal viewpoint?
June 16th, 2009 at 7:38 am
Honestly, has laffer been right about anything ever? Aside from the trivial observation that since revenue is zero at a 0% tax rate, and zero at 100% tax rate, it must have a maximum value somewhere between zero and a 100%, what has he done (this is just an application of a freshmen calculus max. value theorem – since the function is continious and has two zeros on a closed interval it must have a maximum in that interval)?
Oh and producer prices numbers came in lower than forecast today. We’ll see where the CPI is tomorrow.