Stagflation

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I think this is the path we are heading to. After the fed raises rates a few notches... after the tax cuts are done with.

A few catalysts that might make this more convincing are... bush losing the election and kerry raising taxes and lowers gov spending to more responsible levels, terrorist attack which might freeze the consumer and weaken economic growth, real estate market crashing which would be the death of the wealth effect for the baby boomers.

As Mark Twain says.. history might not repeat itself, but it sure can rhyme.

Read this...

http://www.gold-eagle.com/editorials_00/blanchard123000.html
 
The messed up part about the whole thing is that... real wages are flat which means people are not making more money to compensate for the higher inflation.... and job outsourcing will strip away more jobs than people think. Right now Dell has less US workers than foreigners.. goes to show u how times are changing. Employment will pick up slowly right now.. but then it will just go negative again because the US is losing its competitive edge. High tech, services, and innovation will be shifted and developed in India and China. We will no longer be the fastest growing economy.. and we will not be a leader in anything anymore.. except for DEBT. There were 2 things that gave the US economy an edge over the world.. which was our sound banking and our political stability. Ridiculous debt levels and terrorism will plague this country for the next decade.
 
In France the socialists have just won 20 regions on 22. It's not presidential election nevertheless World Political opinion are in synch and essentially driven by media brainwashing. So if it has switched massively to left whereas it was right on last presidential election, I take this as a bad sign for Bush. Now I am not more pleased if Kerry is elected as I am not socialist but above all I remind that Kerry belongs to the same satanist sect as Bush: the Skull & Bones and that their fraternity is above left and right... business crookerie is mostly what they have in common only two different facettes of the same coin: war spending or social spending thriugh public debts instead of restauring the true economy creating true job and real wealth.
 
Quote from VOLUME:

http://www.gold-eagle.com/editorials_00/blanchard123000.html


That article is over three years old.
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I know.. but it gives a good understanding what stagflation is about.

I think its right on the money.. except the timing was totally off.

The biggest problem we will have is that inflation will start to creep up and the fed will be forced to raise rates.. right now the economy numbers look fine.. but I bet going forward it will stall very quick.. and the Fed will have their hands tied because if they start cutting rates again inflation will get really out of control.

So the Fed becomes stuck... the bottom line is that if u take away the super low rates.. and take away the tax cuts and wild gov. spending u have a really shitty US economy. Its just a matter of time until the true face will show itself.


--MIKE
 
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