Well, I think the global economy is in the position for continuing good growth with inflation well in check.
But clearly an economy that’s growing and expanding like this one – and it certainly is doing that with high GDP output, employment numbers strong, capacity utilization strong – that’s an environment in which the Fed needs to continually be alert to early signs of inflation.
In reality there is no such thing as an inflation of prices, relatively to gold. There is such a thing as a depreciated paper currency.
Currently a level of unemployment of 7 percent or more seems to be required to keep inflation from accelerating, a level quite unacceptable as a permanent situation.
No one should expect the value of their house to appreciate quickly – counting on your home to be a significant part of your retirement saving isn’t a winning strategy – but it is reasonable to expect that prices generally will rise with at least the rate of inflation for some time to come.
Cash – in savings accounts, short-term CDs or money market deposits – is great for an emergency fund. But to fulfill a long-term investment goal like funding your retirement, consider buying stocks. The more distant your financial target, the longer inflation will gnaw at the purchasing power of your money.
I’ve made a commitment that state spending in Vermont won’t grow any more than the rate of inflation plus population growth.
I’ve talked about commodity price volatility in the past: go back to the tape… I never said it was about inflation.
Businesses that have gone through an episode of hyperinflation become understandably alert to the threat of it: at the first hint of inflation, they’re likely to increase prices, since they’ve learned that if they don’t, and inflation hits, their businesses will be wrecked.
You can’t continue to have higher education tuition grow at a multiple of the rate of inflation.
By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.
A crucial responsibility of any central bank is to control inflation, the average rate of increase in the prices of a broad group of goods and services.
It is important to recognise near- and medium-term risks to the inflation outlook.
I have spoken about inflation, unemployment, farmers’ problems, security, etc. I keep talking about these issues. I seek answers from the Indian government.
Because food and energy prices are volatile, it is often helpful to look at inflation excluding those two categories – known as core inflation – which is typically a better indicator of future overall inflation than recent readings of headline inflation.
Plutocrats were the chief beneficiaries of so-called neoliberalism and the suite of political changes it brought beginning in the late 1970s – deregulation, weaker protection for unions, the shareholder value movement, and the subsequent inflation of executive compensation.
The central predictions of the quantity theory are that, in the long run, money growth should be neutral in its effects on the growth rate of production and should affect the inflation rate on a one-for-one basis.
During the Greenspan-Bernanke era, the Fed has embraced the view that stability in the economy and stability in prices are mutually consistent. As long as inflation remains at or below its target level, the Fed’s modus operandi is to panic at the sight of real or perceived economic trouble and provide emergency relief.
The Federal Reserve has an official commitment to two different policies. One is to prevent inflation from getting too high. The second is to maintain high employment… the European Central Bank has only the first. It has no commitment to keep employment up.
Life is full of joys and sorrows, much of it our own making. Sadly, the West has voted time and time again for bigger government, more inflation, higher taxes and excessive regulation – all policies that have kept us from Adam Smith’s vision of an opulent society.
Americans have seen the value of the dollar slowly decline due to the steady erosion of inflation.
I think we do need to try to not just rely on the central bank to, in its wisdom, adjust interest rates, but allow for people to avoid being exposed to inflation risk.
Until the Fed dumps inflation targeting and the U.S. abandons its weak-dollar policy, inflation will rule the day.
I have said repeatedly that the way to sustainable growth is to bring down inflation to much more reasonable levels.
And I am convinced that a single focus on preserving the purchasing power of the dollar, in effect, guarding against inflation or deflation, actually creates a solid foundation for the greatest job growth and the strongest economy that America can have.
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
We will not play with inflation. We are living a delicate moment. President Obama spoke to me today about the high unemployment affecting the United States. In this crisis period, when the developed nations are not recovering, it’s prudent to maintain the established inflation target.
Modern conservatism was forged in the crucible of the 1970s inflation crisis, and in the aftermath of the 2008 financial crash many conservatives were convinced that there was nothing the Federal Reserve could do about the vast army of the unemployed without touching off a similar inflationary spiral.
Republicans don’t seem to mind taking inflation into account when the subject is tax rates.
We pay some price when necessary to bring down inflation but that price is temporary and is not large relative to the permanent gain from reduced inflation.
Slow growth and inflation have a tendency to accompany large deficits and increasing debt as a percentage of GDP.
If the universe sprung into existence and then expanded exponentially, you get gravitational waves traveling through space-time. These would fill the universe, a pattern of echoes of the inflation itself.
I oppose indexing gas tax hikes to inflation.
I have never believed that central banks should have rigid inflation targeting. That is not a good thing to stabilize. There is nothing in economic theory to back this.
After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. By comparison, the average real income of the other 95% of households grew less than 10%.
If people expect high inflation and raise wages to reflect the high inflation, then it becomes self-fulfilling.
Near-zero policy rates that may be considerably expansionary in an economy with high inflation could be contractionary when inflation is too close to zero, or worse, deflation has set in.
The reality is that business and investment spending are the true leading indicators of the economy and the stock market. If you want to know where the stock market is headed, forget about consumer spending and retail sales figures. Look to business spending, price inflation, interest rates, and productivity gains.
Inflation is lower and more stable and the real business cycle fluctuations are more modest.
Buy a $100 U.S. bond and frame it to teach your children about inflation by watching the U.S. bond value diminish to almost nothing over the next 20 years.
Following Greece’s defeat at the hands of Turkey in 1897, Greece’s fiscal house was entrusted to a Control Commission. During the 20th century, the drachma was one of the world’s worst currencies. It recorded the world’s sixth highest hyperinflation. In October 1944, Greece’s monthly inflation rate hit 13,800%.
If we have wealth, it will be protected from inflation and possibly even enhanced in value.
Massive debts owed to foreign creditors weaken our global influence and threaten high inflation and steep tax increases for our children and grandchildren.
What I’m trying to say is that for the average investor, what I would encourage them to do is to understand that there’s inflation and growth. It can go higher and lower and to have four different portfolios essentially that make up your entire portfolio that gets you balanced.
After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. By comparison, the average real income of the other 95% of households grew less than 10%.
With the shrinking of the US economy, and it’s shrinking very rapidly, you not only have more money, but you also have fewer goods. That’s a classic double-whammy on inflation.
The two important variables for the policy formulation are projected inflation and the output gap. There is no clear hidebound mathematics that we must give ‘X’ weight to inflation and ‘Y’ weight to growth and form the associated policy.
You can’t have a regime which continuously subsidizes things; as inflation rises, you keep prices of certain things unchanged.
I oppose indexing gas tax hikes to inflation.
If you want to slow medical inflation in the private sector, it makes sense to expand the government’s investment in private health care.
The central focus of what we are doing at the Fed is to keep inflation from accelerating – and preferably decelerating.
