“The Return of Stagflation”
“We are entering an era of high inflation, to judge by the massive growth of the money supply in the United States, Europe and Asia, and the stubbornness of central bankers who insist that high unemployment demands the creation of even more money. The last time the world went through a similar period was the 1970s. The term that defined the era was “stagflation.”
In a nutshell, stagflation back then was the result of a recession partly caused by stratospheric oil prices followed by the decision to print tons of money in the hope of inflating the economy out of unemployment. In other words, stagnation was not so much because of oil prices; rather, it was the result of the monetary response to the stagnant environment that the high energy costs had helped create. Inflation simply added a new ill to an already grave situation.” Read more.
“The Return of Stagflation”
Alvaro Vargas Llosa
Via the Independent Institute
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