The Downward Spiral

[Geee]

American Spectator:

Accelerating downward spiral. That is what I have been predicting for the Obama Administration for over two years. And now it's happening. Events are spinning out of control.

Rising inflation is restricting the Fed's options for keeping the economy high on monetary stimulus crack. The result? Fast developing market chaos.

On account of President Obama's economic policies, the economy never recovered from the last recession. Now it may go back into full scale recession before any recovery occurs. We may soon be living through a reenactment of the 1930s, not the 1970s. If we do not change course, there will be a double dip recession by 2013, directly caused by the economic policies Obama already has in place under current law.

And now we have riots in Obama's Amerika, kept quiet by the media, echoing the violence in London.

Inflation and the Fed

Rapidly increasing producer price inflation is now spilling over into the consumer price index. The CPI soared in July at an eight percent annual rate, up close to four percent over the past year. The Wall Street Journal reported on Friday that these price pressures "could constrain the Federal Reserve from taking more action soon to spur economic growth and hiring." Or, as the Journal quoted J.P. Morgan Chase chief economist Michael Feroli, the budding inflation "could slow the degree to which the Fed provides further monetary stimulus."

Why is that? Because continuing to pump up the money supply could push inflation into double digits. And stopping it then will be even worse, throwing the economy into a bigger recession, just like in the 1970s.

But Rick Perry has it pegged right. The Fed is committed to pumping up the money supply right through the election, to prevent any downturn from darkening Obama's magical Dupe America reelection tour. That is why the Fed is so committed to keeping interest rates near zero until 2013. So to accomplish this, they’re running the printing presses. Inflation may well climb into double digits next year.