EconoMeter: Is inflation a threat to economy?
Roger Showley, SAN DIEGO UNION-TRIBUNE
Sunday, June 12, 2011
Kelly Cunningham, National University System
Inflation is already rising and only getting worse. Continuing weakness in the economy will not allow for tighter liquidity or interest rates to rise, so the Fed will continue artificially propping up the economy with quantitative easing, which is effectively printing money and debasing the value of the U.S. dollar. All this results in ever higher inflation, especially as so much manufacturing of goods formerly produced in America is now done overseas. As the value of the dollar further erodes, commodity and energy prices will continue rising. Stagflation with both high inflation and unemployment is the inevitable result.