What History Tells Us about Taming Inflation

The comments below are an edited and abridged synopsis of an article by David Stockman

Stockman discusses Fed Chairman Paul Volcker’s battle with inflation during the 1980s, and concludes that taming it came at a steep price to the macro-economy because there was no alternative once the inflationary spiral became embedded.

What History Tells Us about Taming Inflation - BullionBuzz - Nick's Top Six
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Needless to say, the Volcker era proved that stagflation is stubborn once it gets into the price structure of the economy.

Back to today: A bad stagflation is here. Since the Fed will be locked in a battle to tame the price side of the equation even as real output falters for months (years?) to come, it’s doubtful that the economic contraction will be described as a “very slight recession.”

The truth is, we’re on the cusp of an economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming.

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