Comments on: Should we worry about inflation? http://www.savings-bond-advisor.com/should-we-worry-about-inflation/ Fri, 29 Aug 2008 20:45:06 +0000 http://wordpress.org/?v=2.0.4 by: Steve the K http://www.savings-bond-advisor.com/should-we-worry-about-inflation/#comment-1390 Wed, 22 Nov 2006 15:19:10 +0000 http://www.savings-bond-advisor.com/should-we-worry-about-inflation/#comment-1390 Based on what Ron Muhlenkamp has said, as long as people and Congress and the Fed would rather have a recession than 1970s-era inflation, inflation will not get too high. If it looks like inflation will get too high, the Fed will react to nip it in the bud. However, if Congress decides that they will do ANYTHING to prevent another recession (like they did in the 1960s and 1970s), we may get sky-high inflation again. What will happen when this philosophy meets the desire for controlled inflation of the 1980s and 1990s, I don't know. If taxes are hiked dramatically and people have less income to spend and invest, that will hurt the economy and the stock market. The only people who will have money will be the wealthy people working in the Imperial Federal government. Based on what Ron Muhlenkamp has said, as long as people and Congress and the Fed would rather have a recession than 1970s-era inflation, inflation will not get too high. If it looks like inflation will get too high, the Fed will react to nip it in the bud. However, if Congress decides that they will do ANYTHING to prevent another recession (like they did in the 1960s and 1970s), we may get sky-high inflation again. What will happen when this philosophy meets the desire for controlled inflation of the 1980s and 1990s, I don't know. If taxes are hiked dramatically and people have less income to spend and invest, that will hurt the economy and the stock market. The only people who will have money will be the wealthy people working in the Imperial Federal government.

]]> by: Tom Adams http://www.savings-bond-advisor.com/should-we-worry-about-inflation/#comment-814 Mon, 11 Sep 2006 14:53:15 +0000 http://www.savings-bond-advisor.com/should-we-worry-about-inflation/#comment-814 In Mauldin's September 8 newsletter, <a href="http://www.investorsinsight.com/thoughts_va.aspx?EditionID=384" rel="nofollow" rel="nofollow" rel="nofollow">The Fat Lady Hasn't Sung</a>, he reports on a speech by the President of the Federal Reserve Bank of Dallas, Richard Fisher. Fisher directly addresses the issue of whether the Federal Reserve would allow inflation to help with a government debt crisis: <blockquote> <b>A Warning for Politicians</b> Finally, Fisher referred to the national debt and growing social security and Medicare obligations. [He said it's] not the Fed's problem, and he flatly asserted they will not monetize the debt in the future. This is a political problem. Congress is going to have to get its own house in order. The Fed will not bring back inflation to accommodate a profligate Congress. He did not have kind words for the lack of spending control in Washington. </blockquote> All well and good, but the Federal Reserve's ability to control inflation isn't like driving a Cadillac - it's more like riding a bucking bronco. In Mauldin's September 8 newsletter, The Fat Lady Hasn't Sung, he reports on a speech by the President of the Federal Reserve Bank of Dallas, Richard Fisher. Fisher directly addresses the issue of whether the Federal Reserve would allow inflation to help with a government debt crisis:

A Warning for Politicians

Finally, Fisher referred to the national debt and growing social security and Medicare obligations. [He said it's] not the Fed's problem, and he flatly asserted they will not monetize the debt in the future. This is a political problem. Congress is going to have to get its own house in order. The Fed will not bring back inflation to accommodate a profligate Congress. He did not have kind words for the lack of spending control in Washington.

All well and good, but the Federal Reserve's ability to control inflation isn't like driving a Cadillac - it's more like riding a bucking bronco.

]]>