Inflation Is The One Promise Central Banks Can Deliver – Ep 76

  • Markets have been volatile but economic data still looking bad
  • Chicago Fed National Activity Index: contrary to expectations, came in at -.42 in addition a downward correction for last week to a 2-year low
  • Weekly Redbook Same Store Sales Survey down to lowest annual increase in 4 years with a dramatic rate of decline in recent months
  • Implausible excuses, such as the weather or the timing of Easter, attempt to mask the fact that the economy is just weak
  • Oil prices moved above $57, forming a sizable W-bottom
  • Canadian dollar up about 5%
  • Canadian inflation, especially food prices up
  • This signals the end of rate-cutting cycle in Canada
  • Central banks around the world are going to have to dial back on their cheap money policies
  • The “Threat of Deflation” will be in the rear view mirror
  • Central banks may like high prices, but consumers don’t
  • President of the Federal Reserve Bank of Boston Eric Rosengren stated our 2% inflation goal is “too low”
  • He thinks higher inflation allows for more growth, and allows interest rates to remain low
  • Cheap money does not create economic growth and doesn’t create employment – it undermines both
  • Cheap money applied to a slower economy creates a vicious cycle
  • A weakening dollar will put upward pressure on already rising consumer prices
  • The Fed is hinting at a higher inflation goal
  • The problem is we can’t do anything about our inflation because our debt is out of control
  • Fiscally solvent countries are able to raise rates and still service their debt
  • All the U.S. can do is “talk tough”
  • If they had a “Hall of Economists” in Disneyland, the Keynesians would have to be in Fantasyland
  • Paul Krugman’s Keynesian experiment is blowing up the U.S. economy
  • Everybody will figure it out before Paul Krugman does

Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast.

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