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U.S. ECONOMY FACING “ICE OR FIRE,” WARNS EXPERT: Frozen Economy or a Blaze of Inflation Both Threaten
America's central bank, the Federal Reserve, said days ago it currently plans to pump no more stimulus money into a slightly-improving U.S. economy.
“The $6 Trillion in stimulus the Fed and Government have already printed out of thin air are mostly unspent, held by banks and other companies or invested into government paper. This is like frozen inflation gasoline, and the Fed has just said that, at least for now, it will stop playing with matches,” says former think tank futurist Lowell Ponte. “But the Fed really hasn't, and it may already be too late anyway.”
“All that explosive money, despite the bad economy, has begun melting into a spring flood of inflation,” says Ponte, co-author with Craig R. Smith of the widely-discussed 2011 book The Inflation Deception: Six Ways Government Tricks Us...And Seven Ways to Stop It!
“Key food inflation is already much higher than the government's massaged numbers suggest. Year to year in January, the cost of milk and sugar was up 9.9 percent, hamburger 10.6 percent, chicken 8.2 percent, bacon 7.6 percent, eggs 9.5 percent and cheese 10.3 percent,” says Ponte.
Ponte added, “Gasoline has topped $3.84 a gallon nationwide, is already far above $4 in California and several other states, and could easily top $5 per gallon this summer. Higher fuel costs make everything more expensive, and the doubling of gas prices since President Barack Obama drastically restricted drilling on public land now threatens to stall our weak economy back into a recession – or worse.”
“To fight such inflation the Fed needs to raise interest rates,” says Ponte. “But instead, the Fed just reaffirmed that it intends to hold rates near zero until mid-2014. This will keep the casino open, reward speculators, and punish savers with low interest and workers with devalued dollars.”
“We could get the worst of both worlds,” says Ponte, “-- a stagflation frozen economy with high unemployment, higher taxes and near-zero growth, like today, and a blaze of inflation that further debases the Dollar as the Fed expands its money-printing Quantitative Easing 3 through its current gimmicks as mortgage buying and “bond sterilization.”
Lowell Ponte and Craig R. Smith, who are also co-authors of the 2010 book, “Crashing the Dollar: How to Survive a Global Currency Collapse,” are available for interviews.
Sources: Michael Pollaro, “Money Supply Booming, Seeds of the Next Greater Recession,” Forbes, March 12, 2012. URL: http://www.forbes.com/sites/michaelpollaro/2012/03/17/money-supply-booming-seeds-of-the-next-greater-recession/
“The Everyday Price Index,” American Institute for Economic Research. 2012. URL: http://www.aier.org/article/7545-everyday-price-index
Jeff Cox, “Rising Gas Prices Could Soon Stall Economic Recovery,” CNBC, March 16, 2012. URL: http://www.cnbc.com/id/46760636
Amity Shlaes, “Watch Bernanke's 'Little' Inflation Capsize U.S.,” Bloomberg News, March 14, 2012. URL: http://www.bloomberg.com/news/2012-03-14/watch-bernanke-s-little-inflation-capsize-u-s-amity-shlaes.html
Jon Hilsenrath, “'Sterilized' Bond Buying an Option in Fed Arsenal,” Wall Street Journal, March 7, 2012. URL: http://online.wsj.com/article/SB10001424052970204276304577265803925182234.html
Suggested Interview Questions:
(1) The government's “core inflation index” says that price increases are very low. What are some examples of rising prices that this index leaves out?
(2) Speaking of soaring gas prices, you say that government policies have flooded our economy with the monetary equivalent of gasoline. How dangerous is this?
(3) If inflation gets out of control, what might hyperinflation be like?
(4) The Federal Reserve says it has no current plans for more economic stimulus, but you say that its policies, such as “sterilized” bond buying, are designed to push the economy. How?
(5) Why is the Federal Reserve creating deliberate inflation?
(6) If you were chairman of the Federal Reserve, what would you do?
(7) So will our economic be devastated by ice – or by fire?
(8) How can we protect our families and savings from these risks?
ABOUT LOWELL PONTE…
Lowell Ponte (PON-tee) is a former think tank futurist and was an editor Reader's Digest Magazine for many years during its heyday when it was one of the most widely read publications in the world. Lowell is co-author with of The Inflation Deception: 6 Ways Government Tricks Us… and 7 Ways to Stop It! (2011), and Crashing The Dollar: How to Survive a Global Currency Collapse (2010). Ponte’s articles have appeared in The Wall Street Journal, The New York Times, and many other publications. He is currently a columnist at Newsmax.com. Lowell has been a guest on "The Today Show," "Good Morning America," "David Letterman" and other programs. Lowell has also been an aide in the California legislature, a reporter in Washington, D.C., a foreign correspondent reporting from 33 countries, co-partner in a successful Hollywood public relations firm, and a radio talk show host.
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