USA Stagflation is confirmed

As advanced by Brahmason on Feb 15th ( see the post "Take it for granted it is stangflation" ) the authorities have today confirmed that prices have gone up in February by 1.6 % beating all forecasts . The drama however is that core inflation ( the fraction of inflation related to net demand as energy and fresh dood is excluded ) is only 0.2 % .

The gold always well informed had gone down despite other parameters that sort of promoted its value upwards .

Indeed the USA economy after a long cycle of living on Wall Str. with absolute disregard for investments with strong added value , is heading for an economic equation where the loss of reachness ( growth with strong added value ) makes it impossible to cope with defficits and debt .

The USA needs to assume that for a very long time austerity and investments in Silicon Valley type products and services , with a low exchange dollar ( low does not mean weak ) , is the only way out of this almost out-of-control crisis .


Published in: on marzo 16, 2011 at 4:37 pm  Dejar un comentario