Most Americans Do Not Understand the Horror of InflationWave
Oct 14, 2021 14:23:10 GMT -5
Post by bloodbought on Oct 14, 2021 14:23:10 GMT -5
Most Americans Do Not Understand the Horror of the Coming Inflation Wave
By Larry Johnson
Published October 14, 2021 at 7:15am
If you are 55 years old or younger you do not have living memory of what it means when inflation takes hold of our economy. It is not merely that you the price of everything goes up. It is a recipe for killing the economy and will feed a black market and reduce the revenue that governments–local, state and federal–rely on to provide services.
I graduated high school in 1973. The United States was on the cusp of a major inflation crisis (I encourage you to read the article that is linked here):
This is the gruesome story of the great inflation of the 1970s, which began in late 1972 and didn’t end until the early 1980s.8 In his book, “Stocks for the Long Run: A Guide for Long-Term Growth” (1994), Wharton professor Jeremy Siegel, called it “the greatest failure of American macroeconomic policy in the postwar period.”
The great inflation was blamed on oil prices, currency speculators, greedy businessmen, and avaricious union leaders. However, it is clear that monetary policies, which financed massive budget deficits and were supported by political leaders, were the cause. This mess was proof of what Milton Friedman said in his book, Money Mischief: Episodes in Monetary History: Inflation is always “a monetary phenomenon.”
The great inflation and the recession that followed wrecked many businesses and hurt countless individuals. Interestingly, John Connally, the Nixon-installed Treasury Secretary who did not have formal economics training, later declared personal bankruptcy.
We were not just paying higher prices for food and gas. If you wanted to buy a house you were saddled with a double-digit mortgage interest payment. If you are now buying a $300,000 house with a $60,000 down payment, your monthly payment with a 3.8% is $1,401.63. What happens when the interest rate is 16%? You will pay $3,510.75. What do you think that does to the sale of houses? It kills the real estate market.
Continued at link
By Larry Johnson
Published October 14, 2021 at 7:15am
If you are 55 years old or younger you do not have living memory of what it means when inflation takes hold of our economy. It is not merely that you the price of everything goes up. It is a recipe for killing the economy and will feed a black market and reduce the revenue that governments–local, state and federal–rely on to provide services.
I graduated high school in 1973. The United States was on the cusp of a major inflation crisis (I encourage you to read the article that is linked here):
This is the gruesome story of the great inflation of the 1970s, which began in late 1972 and didn’t end until the early 1980s.8 In his book, “Stocks for the Long Run: A Guide for Long-Term Growth” (1994), Wharton professor Jeremy Siegel, called it “the greatest failure of American macroeconomic policy in the postwar period.”
The great inflation was blamed on oil prices, currency speculators, greedy businessmen, and avaricious union leaders. However, it is clear that monetary policies, which financed massive budget deficits and were supported by political leaders, were the cause. This mess was proof of what Milton Friedman said in his book, Money Mischief: Episodes in Monetary History: Inflation is always “a monetary phenomenon.”
The great inflation and the recession that followed wrecked many businesses and hurt countless individuals. Interestingly, John Connally, the Nixon-installed Treasury Secretary who did not have formal economics training, later declared personal bankruptcy.
We were not just paying higher prices for food and gas. If you wanted to buy a house you were saddled with a double-digit mortgage interest payment. If you are now buying a $300,000 house with a $60,000 down payment, your monthly payment with a 3.8% is $1,401.63. What happens when the interest rate is 16%? You will pay $3,510.75. What do you think that does to the sale of houses? It kills the real estate market.
Continued at link