"I think we are going to see more inflation............a good excuse to "save Jobs". Inflation only saves a couple of jobs in the short run. In the long run it is a cause of high unemployment on itself. My friend ZDREG wanted to conduct a poll on the matter.
Don't know that it actually WILL save jobs. Certainly will raise prices and reduce the buying power of savings.
High inflation, leads to higher interest rates, which has a negative effect on business (and hence, employment). Good for holders of long-term debt.
In the best possible case, inflation is a mechanism to forcefully take money from cash-rich savers and channel this money into productive activity, thus spreading the cost of economic progress across a wider constituency. However, the most probable outcome is that savers get screwed and nothing comes of it, in which case everyone suffers in the longer run.
Ahhhh, the good old Phillips Curve illustration. There are definitely some stimulating topics of ET from time to time. Inflation will boost employment and therefore output in the short run, in the long run, we'll only be left with the higher prices. This is poor tool that policy makers use to "jumpstart" economies like they are doing now. It makes perfect sense, price of oil rises, oil becomes profitable to produce and production is ramped up. Oil field workers go back to work, new rigs are commissioned, etc. Now more oil is being consumed by the rising employment force and oil field machinery. Classic demand-pull scenario. It's only a temporary effect, and if inflation gets too high, it will kill the fragile economy. Benny and Timmy need to stand vigilant, and be ready to keep inflation at moderate levels.
Not if you can get the Chinese to buy your debt and keep rates artificially low. The US government has found the goose that lays the golden egg in globalization. This can't go on forever though, but I think it will continue much longer than most people would expect.
From TreasuryDirect: 0% I Savings Bond through 10/31/09 When did they lower the max amount that can be purchased? I use to own these awhile back but I remember the limit was much higher. Here's another thing of interest: Rising reserves of unused oil put strain on storage And oil prices continue to rise. This looks a lot like the car inventories that are building. At some point, maybe when there is no more room to store either one, they will hit the market and drive down prices. Krugman has an article expecting wage deflation later in the year. Even with all the money the Fed is putting into the system, no one wants it as witnessed by the rise in the savings rate. The country has become Japanese. Some of the rise in commodity prices have been due to restocking for future expected demand. And if future demand for commodity produced goods is less that expected? Well then ya got a whole lotta excess commodities sitting around. I don't see where this so called inflation is coming from.
It has and funniest thing is that those at the periphery always think the middle is the one at the most risk. Many EU counties will completely shite the bed before America see's any meaningful uptick in interest rates.