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SW Saskatchewan | Well, what were the circumstances that drove them up last time around?
-residual inflation from the Vietnam war
-fuel price increase
-commodity price inflation
-speculative buying - "getting on the train before it left town"!
This time around there are a lot of similarities, big difference is that this time the economy tanked BEFORE any of the remediative moves were put in place.
Greenspan and Bush II forgot the old aphorism that "no mountain grows to the sky", afraid of any restrictive policies they let the economy implode before dumping Billions into the Banks, Insurance companies and GM.
Last time this happened was in 1929, the 1980 's and 2000 dot com contractions were not "real sector" collapses.
WWII was an experiment that most economists would not want to repeat--putting it into the equation made it difficult to read what really the result of economic intervention policy was.
If Iraq-Afghanistan are significant enough in terms of our economy, 2000 may have only been 1937 and we could be entering a 1940's post war era.
Except this time, it is the western democracies that have had their economies blasted to H while our trading partners have just been getting rich loaning us the $ to fight these wars(think China).
Suspect that we will have a long period of doldrums rather than firestorm of inflation. | |
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Question for Senior
