Troubled global economies fuel inflation fears by printing piles of money

Monday, January 16, 2012 by: J. D. Heyes
Tags: inflation, printing money, global economy

(NaturalNews) As if Americans and people of other Western nations didn't have enough economic trouble, now comes new fears of rampant inflation with news that many of the world's largest central banks are trying to "create" wealth by "printing money like gangbusters," a noted analyst said this week.

Pimco founder Bill Gross, in an interview with CNBC, said the banks are printing "hundreds of billions" in currency and putting it all in circulation, which "can produce reflation and that's why we're seeing the pop in oil, gold" and other commodities, he said.

At a time when Eurozone credit is being downgraded due to excessive debt and, in the United States, the government is poised to add $6.2 trillion in new debt during President Obama's first term, the last thing the people of the world's "richest" nations need is a currency and inflation crisis. Yet, that seems to be where things are headed.

Gross says the tactic being employed by the central banks also runs the risk of creating deflation, if you can grasp that, which would happen instead "if the private credit markets can't produce some sort of confidence and solvency going forward." He adds: "So we're at great risk here, not only in the U.S. but on a global basis."

The news comes as Standard & Poor's downgrades the credit of France and eight other nations, as debt problems continue to plague the "benefits-for-all" economies of socialist European nations.
At home, the news is not much better. Under Obama's watch, Democrats and Republicans are on pace to add more red ink to our books than the U.S. added from Washington to Clinton. And, at least Europe can say it wasn't first when it comes to losing credit ratings: S&P downgraded our credit back in August.

How far we've come - or regressed. The entire U.S. national debt did not even surpass $6.1 trillion in total until August 2002, during George W. Bush's first term. Paul A. Volker, president of the Federal Reserve (our central bank) from 1979 to 1987, even says "a little inflation can be a dangerous thing." In a September column for The New York Times, Volker says past economic history shows that encouraging inflation as a way to get businesses to invest and wages to increase is doomed to failure:

"[T]he danger is that if, in desperation, we turn to deliberately seeking inflation to solve real problems -- our economic imbalances, sluggish productivity, and excessive leverage -- we would soon find that a little inflation doesn't work. Then the instinct will be to do a little more -- a seemingly temporary and reasonable 4 percent becomes 5, and then 6 and so on."

Inflation, stagnation, borrowing, debt, and little-to-no real growth, coupled with increasing economic pressures from overseas as the world's stronger economies struggle as well, can only mean bad things for the future. Compounding that threat is the fact that politicians on both sides of the Atlantic seem impotent or worse, unwilling, to do what's necessary to stop hemorrhaging trillions of dollars their governments simply don't have. Eventually the cash spigot runs dry; printing more money doesn't make you "rich," any more than a book of blank checks means you automatically have money in your account.

Sources:

http://www.cnbc.com/id/45960932

http://cnsnews.com/news/article/obama-pace-borrow-62t-one-term-more-all-presidents-washington-through-clinton-combined

https://www.naturalnews.com/033253_Standard_&_Poor_debt_rating.html

http://www.nytimes.com/2011/09/19/opinion/a-little-inflation-can-be-a-dangerous-thing.html