kootchman
Imagine being on SS during the Carter years. Or, on a fixed income annuity. Then imagine a core inflation rate of 17%. Every dollar you get buys less of everything. Less food. Less medical care, less fuel.
Then. to stop the runaway inflation, the interest rates rise because the feds choke off the money supply… I believe at one time during that administration…a home mortgage rose as high as 17%. I bought my first home in WA…. with an 11/1/2 interest rate.
So, you have inflation, then a monetary correction which killed off jobs… in fact, jobs were scarcer then they are today. The two storm fronts collide… and you had a new world… “stagflation”… a stagnant economy beset with high interest rates and inlfation.
Now, we have the same scenario, except we have no Ron Reagan. The Carter years were terrible.. BUT.. instead of cutting off inflation as painfully as it was…. we keep printing more and more money… throwing it around as “stimulus” dollars. It will come back as roaring inflation. The deeper we get.. the harder the correction will be. See Japan went through this shortly thereafter and they did what? Lowered interest rates, printed money… and their recession didn’t last three years… it lasted almost two decades. The government is trying to avoid writing down the value of a collapsed housing market…. by lending at 4%… hoping inflation will make it go away and home values will rise.
when currency is worth nothing.. it buys nothing,