[firestarter]

$this->bbcode_second_pass_quote('nth', '
')
Mortgage collapse has been experienced before. US seems to survive those quite well.

[nth]

$this->bbcode_second_pass_quote('firestarter', '
')
I wouldn't be as sanguine this time around, however, in that the expansion (bubble) is quite a bit larger than the fundamentals would support, not to mention the weakness we encounter now internally (economic emasculation, especially in the manufacturing sector) vis a vis Asia, and globalization in general.

[firestarter]

$this->bbcode_second_pass_quote('nth', '')$this->bbcode_second_pass_quote('firestarter', '
')
I wouldn't be as sanguine this time around, however, in that the expansion (bubble) is quite a bit larger than the fundamentals would support, not to mention the weakness we encounter now internally (economic emasculation, especially in the manufacturing sector) vis a vis Asia, and globalization in general.

[Bleep]

$this->bbcode_second_pass_quote('', '[')url=http://www.koreaherald.co.kr/SITE/data/html_dir/2006/09/11/200609110029.asp]China presents stagflation dilemma (link)[/url]
Sizzling economy pushes up oil and commodity prices

By Ko Kyoung-tae

...skip...

As the sizzling economy has increasingly guzzled crude oil and commodities in recent years, China is clearly beginning to ship inflation risks abroad.

Its soaring demand for a wide array of consumer products is also pushing up retail prices from New York to Seoul, posing challenges to the world's central bankers.

Such inflation risks are mounting even amid a global economic slowdown, which puts inflation fighters within a well-known economic dilemma between stable prices and higher growth. The Korean economy is running into similar difficulties.

[coyote]

Guys, it's just the beginning of price volatility, that's all. There are going to be cycles. We knew this was going to happen. Should speed up and get worse over the next few years.

[GoIllini]

$this->bbcode_second_pass_quote('firestarter', '')$this->bbcode_second_pass_quote('nth', '
')
Mortgage collapse has been experienced before. US seems to survive those quite well.

[Bleep]

Stagflation and the Tight Money Policy

$this->bbcode_second_pass_quote('', '[')url=http://en.wikipedia.org/wiki/Stagflation]Stagflation[/url] creates a policy bind where attempting to correct one problem creates another. The problem in monetary policy is particularly acute, because effects of rising inflation and unemployment are especially hard for the central bank to counteract. The bank has one of two choices to make, each with negative outcomes. First, the bank can choose to pursue a loose money policy to stimulate the economy and create jobs by increasing the money supply (by lowering interest rates) and exacerbate the inflation problem further. Or second, pursue a tight money policy (by increasing interest rates) to try and rein in inflation at the cost of perhaps increasing unemployment further.

[Revi]

I just got a publication from my retirement nonsense people, called the Director. It reads like a peak oil site! The Economic update says that "the global economy is forecast to slow over the next year... This weakness will originate in the US, led by the housing market and consumption"

It also says that inflation was up to 4.3% so far this year, as of 6/30/06.

Ouch! The sky is actually falling!

[Bleep]

The problem with stagflation (stagnation/inflation) is that it manifests in two forms depending on the response to it.

Based on the definition of stagflation as "falling employment and higher prices as the money supply is tighten via rising interest rates", yes, this process is happening right now. It causes the dollar to be worth more stuff but then there's fewer dollars to be had effectively. This is the "make it more stagnant" phase.

The other response is to drop the interest rates in an effort to stimulate economic growth but that causes the the dollars to be worth less (higher prices.) This is the "make it more inflationary" phase we had earlier when the prime rate was dropped so low.

[Bleep]

$this->bbcode_second_pass_quote('', '[')url=http://today.reuters.com/news/articlebusiness.aspx?type=bankingFinancial&storyID=nSP240203&from=business]Citibank CEO Rhodes pessimistic on world economy (link)[/url]
By Brian Kelleher

SINGAPORE, Sept 15 (Reuters) - Slowing growth in the United States and lagging inflation pose a serious risk to economies around the world, Citibank Chief Executive William Rhodes said on Friday, adding that growth in emerging markets and Europe would not be enough to pick up slack in the U.S. market.

... skip ...

He said the conditions were developing for possible stagflation, or a stagnant economy coupled with rising prices.

[Bleep]

$this->bbcode_second_pass_quote('', '[')url=http://www.bloomberg.com/apps/news?pid=20601103&sid=aLaisrwcN6ag&refer=us]
U.S. Recession on Horizon, Morgan Stanley's Xie Says (link)[/url]
``We're headed for stagflation because the bond market believes the Fed,'' Xie said in an interview today on the sidelines of the International Monetary Fund annual meeting in Singapore. ``Recession will happen when the bond market sees through the Fed and sells off. People will have nowhere to borrow money anymore.''

[mmasters]

$this->bbcode_second_pass_quote('FoxV', 'T')he big question would be then how would the governement get this money moving after a serious stock crash (DOW at 3000-5000) and a good round of bank and bond collapses after those ARMs show their true colours (risk)

[emersonbiggins]

emphasis mine$this->bbcode_second_pass_quote('', 'N')ov. 8 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is likely to "slow noticeably'' this quarter while high commodity prices and a weaker dollar may stoke inflation "for a time."...
"The Federal Reserve is stuck,'' said Allen Sinai, president of Decision Economics Inc. in New York. "If the inflation risk wasn't there, then the prospects for the economy suggest much lower interest rates.''

[emersonbiggins]

Look at this gem in that same article:

$this->bbcode_second_pass_quote('', 'T')he Fed chief said the central bank doesn't take "an alarmist'' view of the impact that lower property values may have on consumer spending.

[Jack]

We're toast. We refuse to even admit there might be a problem, much less act to address the issues.

[kublikhan]

Rising energy costs and slowing economic growth are setting the stage for another bout of stagflation:
http://www.businessweek.com/ap/financia ... HHQ980.htm

[jdmartin]

It really illustrates the point that the Federal Reserve really doesn't have a clue what they can do to help stop the bleeding, because any direction they go in is going to cause more bleeding.

[TommyJefferson]

You're soaking in it.

1% Growth plus 4.3% Inflation = Stagflation

[newman1979]

This is deja vu to those of us who lived through the stagflation of the 70's. Paul Volcker ended the stagflation with quickly raising the FED rate from 5% to 20% fora short time which ended the stagflation. All asset prices fell. But in hindsight, it was the start of a 20 year economic expansion and he is regarded as the one of the best Chairman in FED history. Today everybody knows the cure, but nobody has the guts to cause the pain necessary to cure the economy.

[EnergyUnlimited]

$this->bbcode_second_pass_quote('newman1979', 'T')his is deja vu to those of us who lived through the stagflation of the 70's. Paul Volcker ended the stagflation with quickly raising the FED rate from 5% to 20% fora short time which ended the stagflation. All asset prices fell. But in hindsight, it was the start of a 20 year economic expansion and he is regarded as the one of the best Chairman in FED history. Today everybody knows the cure, but nobody has the guts to cause the pain necessary to cure the economy.