Inflation Threats on the Horizon

William Beach / February 13, 2009

Hardly any Washington policymaker is worrying about inflation right now. Who blames them? The economy continues to contract; prices are falling, not rising; and, President Barack Obama speaks about years, not months, before things are better. Inflation seems about as remote right now as, well, a good return on your stock investments.

This inattention to future inflation is unfortunate: there are mounting signs that the big bugaboo of the 1970s might be ready for a return visit. No, I’m not seeing rising prices; but I am seeing the foundations of inflation in a dramatic expansion of the sources of money and credit. So, what’s up? (more…)