In an article in USA Today, (you can see it here) the paper notes that inflation is "as dead as the Wicked Witch of the West in a waterfall. The consumer price index has actually fallen 1.3% in the past 12 months. So why is everyone so worried about soaring prices?"
USA Today summarizes the inflation fears in a word: debt.
As readers of this forum are aware, the US government owes the world $11.4 trillion — $37,000 for every person in the U.S.
In the next fiscal year, the US government will add $1.8 trillion to that deficit.
USA Today debates various scenarios that could occur. What is interesting is the conclusion.
After weighing several pros and cons the article states, "as the deficits grow, the threat of inflation — with the problems that it brings — grows, too, if only because the measures the country needs to take to prevent inflation are so difficult. There are only three ways to cut the debt: raising revenue, cutting expenses or inflation."
Axel Merk, portfolio manager of the Merk Hard Currency fund, raises a question that is being asked throughout the United States right now... should the United States cure its debts by raising taxes and cutting spending?
"Sure," answers Merk sarcastically. "And then we will all fly to the moon."
So what should the United States do?
"Inflation is the answer," says Merk.
Watch, dear reader, for more such articles in the months ahead as US media outlets prepare America for 'inflation' as the solution for the nation's problems - a repeat of the 1930s pro-inflation campaign.
Like it or not... inflation is coming.
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