Agree, if food/crude/import&export prices keep rising, there will be serious fireworks between congress and the fed. This will include blaming the fed for the high gasoline prices, for example.

Greenspan sees early signs of U.S. stagflation

U.S. economy is showing early signs of stagflation as growth threatens to stall while food and energy prices soar, former U.S. Federal Reserve Chairman Alan Greenspan said on Sunday.

In an interview on ABC’s “This Week with George Stephanopoulos,” Greenspan said low inflation was a major contributor to economic growth and prices must be held in check.

“We are beginning to get not stagflation, but the early symptoms of it,” Greenspan said.

“Fundamentally, inflation must be suppressed,” he added. “It’s critically important that the Federal Reserve is allowed politically to do what it has to do to suppress the inflation rates that I see emerging, not immediately, but clearly over the intermediate and longer-term period.”


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One Response

  1. Though the news from Greenspan about potential Stagflation (Title : Greenspan sees early signs of U.S. stagflation)reported by Reuters is not pleasant, it was a pleasant surprise to read this alert from Alan Greenspan. I am a novice when it comes to Economics and the indicator analysis, but it is quite encouraging to me that this news, for the lack of better term, coincides with my forecast.

    The above statement will make sense if you skim my post on Stagflation ( Nov 7, 2007 and revisiting with more details on Dec 15,2007) at http://vanguardist.blogspot.com/

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