Former Chief IMF Economist Wants Fed to Target Inflation at 5-6%
Submitted by Maitski on Mon, 02/23/2009 - 07:35
The seeds are being planted for the idea of using inflation as a way out of our financial mess.
Check out the story at: http://www.telegraph.co.uk/finance/financetopics/financialcr...
"Professor Kenneth Rogoff, former chief economist of the International Monetary Fund, said the threat of debt deflation called for revolutionary measures as an insurance policy.
"Excess inflation right now would help ameliorate the problem. For that reason, it would be far better to have 5pc to 6pc inflation for a couple of years than to have 2pc to 3pc deflation," he told the Central Banking Journal. The Fed has shifted tentatively to an inflation target, but one anchored nearer "stability". "
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Dangerous business
Slippery eel, juggernaut, whatever you call it. Give a little push into inflation, and next thing you know, freewheeling hyperinflation. Then is lieel be like the Third Reich over here. What they should be doing is raising the govt interest rates, so that avg Joe savings accounts can grow a little more. THAT will get people to spending more when they see that they are actually making some money. Confidence is everything.
Use it up, wear it out, make it do, do without.
--Chuck Douglas
Use it up, wear it out, make it do, do without.
--Chuck Douglas
they let that genie out of the bottle....
and we'll have hyperinflation faster than they can sneeze!
Libera me, let the truth break, what my fears make--Leslie Phillips
But that man should play the tyrant over God, and find Him a better man than himself, is astonishing drama indeed!~~D. Sayers
There is no difference between an authoritarian government from the right or the left...F. A.Schaeffer
.
At a 7% continual increase, it would only take 10yrs to double the amount of currency within circulation. "Everytime a growing quantity doubles, it takes more than all of the previous quantity before to double."
Therefore, if the total economy of the U.S. is valued at $13 trilion per yr, then at 7% inflation for 10 years the economy of the U.S. would be $26 trillion per yr. The 'magic' is the fluctuation of the value of "$" and not the numerical quantity. I'm sure everyone here already knows this.
For a little perspective on residual growth and sustainability watch this lecture: http://video.google.com/videosearch?q=dr.+albert+a.+bartlett...
I haven't quite figured out which side of the line this guy toes(although, I do have my suspicions),he speaks of "desperate" need for population control and peak oil.
Personally, I don't think he takes into consideration the "Law of large numbers" theory.
Anyone ever heard of this Dr. Albert Bartlett from Boulder, Colorado?
Given all the debt in The U.S. and europe
This is the best(only) way to stick it to china, the middle east, and third world countries. Pay off our debt with worthless money.
And if they don't take it, we'll kill them.
But it is a slippery slope, and it does come back to bite us with on going currency and banking problems until we have globalized banking (like nationalized but proped up by the G7 governments) . My guess is the pain will be foisted on the third world, as we rob them of their resources. In exchange there will be more terrorist attacks and more loss of civil liberties.
Ha, ha!
I thought "target inflation" meant raise the interest rate to control it.
What they want to happen is more spending, so by pushing the inflation rate up they will eventually convince people it doesn't pay to hang onto cash and they had better spend it as soon as they get it before it devalues, thereby increasing money velocity and greasing the gears of economic recovery.
The danger is they are holding onto a slippery eel and proposing to let it only a little bit out of their grasp. It could escape them in a split second.
There would come a tipping point when suddenly everyone realized they had to use it or lose it to inflation and in the ensuing spending spree inflation would rocket upward. The next step, since the feds are doggedly following history, would be price controls that cause shortages that are met with rationing. We'll spend half our time in long lines just to buy a few essentials and the economy will suffocate at a time when there are zero savings to revitalize it.
New Hampshire and Ecuador
this is not a ha ha comment
"Ideas have consequences." Ron Paul
"...the most memorable concern of mankind
is the guts it takes to
face the sunlight again."-Charles Bukowski
You're right,
except for the first sentence/paragraph where I was laughing at myself for misunderstanding the heading.
New Hampshire and Ecuador