Deutsche Bank Issues a Terrifying Warning for America Under Biden

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PJ Media

On Monday, Deutsche Bank released a report that further confirms a portent of doom for the U.S. economy and Democrats led by President Joe Biden. While many economists and policymakers claim that the recent uptick in inflation is temporary, Deutsche Bank warned that Biden’s profligate spending, the Federal Reserve’s low interest rates, and global economic trends threaten to unleash persistent inflation, which amounts to an insidious tax on the poor and middle class that benefits the government.

“Few still remember how our societies and economies were threatened by high inflation 50 years ago,” David Folkerts-Landau, Deutsche Bank chief economist and head of research, wrote in a paper co-written by his colleagues Jim Reid and Peter Hooper. ” The most basic laws of economics, the ones that have stood the test of time over a millennium, have not been suspended. An explosive growth in debt financed largely by central banks is likely to lead to higher inflation.”

“We worry that the painful lessons of an inflationary past are being ignored by central bankers, either because they really believe that this time is different, or they have bought into a new paradigm that low interest rates are here to stay, or they are protecting their institutions by not trying to hold back a political steam roller,” Folkerts-Landau added. “Whatever the reason, we expect inflationary pressures to re-emerge as the Fed continues with its policy of patience and its stated belief that current pressures are largely transitory.”

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Consumer prices surge by most since August 2008

The Labor Department said Thursday that the consumer price index in May rose 5% year over year, hotter than the 4.7% increase that was anticipated. The reading was above last month’s 4.2% print.  

Prices jumped 0.6% month over month, quicker than the 0.4% increase that was expected by analysts surveyed by Refinitiv.

 

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Inflation takes biggest 12-month leap since 1990s, report shows

Energy prices increased 27.4% while food prices increased 0.4% over the last 12 months, the report showed.

Thomas Catenacci

June 26, 2021

(Daily Caller News Foundation) — A key index used by the Federal Reserve to measure inflation showed that consumer prices leapt quicker over the last 12 months than they have in three decades.

The personal consumption expenditures (PCE) index surged 3.9% in the 12-month period between June 2020 and May, according to the Department of Commerce report released Friday. The PCE index excluding volatile food and energy prices increased 3.4%, the biggest leap since the 1990s, CNBC reported.

Energy prices increased 27.4% while food prices increased 0.4% over the last 12 months, the report showed.

“I’m on the side of those who believe that the rise in inflation is not going to be temporary, is going to be more persistent,” economist and New York University Stern School of Business professor Nouriel Roubini told Yahoo News on Wednesday. “We have a massive monetary and fiscal stimulus, much bigger and more protracted than we had after the global financial crisis.”

(Snip)

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