We have all heard of Stagflation. I just wonder if we will not see a period of Recflation (RECession and inFLATION) in the U.S. and elsewhere. By increasing the supply of money and lowering interest rates the Feds in the U.S. are making other goods more expensive. Add to this the fact that basic foodstuffs are increasing in price because of decreased supply, and increased costs for transportation, packaging, etc. The high price of oil increases the price of fuel, transportation, and all products such as plastics that depend on oil production. Diversion of agricultural production into ethanol does not help either.
Of course some areas such as house prices will see falling prices but in other areas prices may still rise because demand is inelastic or increasing as with global demand for food.


Popular posts from this blog

Danish company uses high tech solution to save water

Over next 3 years Chinese giant Alibaba will invest $15 billion in new technology

Interview with UN Envoy Martin Kobler on situation in Libya