Ready or Not, Stagflation Is Here


(FOX Business)

Stagflation is one of the worst economic conditions a country can be in, and the United States just entered it.


It has actually been responsible for revolutions and uprisings in developed countries around the world. Most recently Greece, Spain and Portugal are experiencing severe doses of this dreaded economic condition. It is extraordinarily difficult to work through and often destroys wealth for generations.




The reported unemployment rate is high (8.1%) but a more-accurate level of unemployment is buried in the Bureau of Labor Statistics (BLS); section U-6 of the BLS states that unemployment rate is closer to 14.5%.


The second factor of stagflation is slow economic growth. The GDP growth rate is the broadest indicator of how much our economy is growing. Across the board most economists have been lowering their growth forecast for the U.S. I don’t believe that we will be above 2% at year end

Finally, prices are rising all around the country. The unprecedented printing of money through quantitative easing programs has been responsible for a majority of this sharp price rise. It is well known that the CPI grossly underestimates the actual increase in the cost of living. Prices on all goods and services are rising drastically. If you were to remove all the manipulation and biases that the government uses in its inflation calculation you will see that inflation is running at about 7%.

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