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Good idea... would not have thought of that


This is a classic STAGFLATION.

The most recent bout of Stagflation ended with a massive run up in rates.



To the extent that there is stagflation, it started in 2008.

2004, 2005, 2006, etc. had neither stagnation nor inflation.


Another view is that the Fed's inflationary monetary policies of the past six months have turned the dollar into a joke. The results are what you see here in the food and oil markets. Turning dollars into physical things of value.

We've been watching a dollar collapse in progress for months.


The prices in the food and oil markets are being pushed more by supply and demand issues...and speculation.

There are severe food shortages developing throughout the world, not in just the US. And it is well documented that it is caused by supply problems.

As far as the dollar's exchange rate is concerned in all of this, the Fed hasn't inflated the dollar supply so much as demand for existing dollars has just dropped. For every dollar the Fed extends over the counter for helping banks (and now non-banks) liquidity problems, it quietly takes the same amount out of circulation by selling T-bills it has.
And the Euro is in more demand because interest rates are higher for Euro-denominated debt. Thus the velocity mis-match between those two (and some others) currencies are simply being reflected in the exchange rate.

Sorry if I appear as a terminology Nazi, but 'inflationary' to me in the context of a monetary authority's actions is defined as 'printing too much money'. The Fed is doing a lot of things, but that isn't one of them, technically.


Oil passed $120 today. I sure hope you're right about the "virtuous cycle" you've talked about.

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