What I failed to see was the great inflation in house prices from 2004 to 2006.
Yet central banks failed to foresee either the 1930s depression or the great inflation of the 1970s.
It only put the house bubble on hold and prepared (by way of ridiculously low interest rates) the great inflation of 2003 to 2005.
The Fed was largely oblivious of its handiwork because price indexes weren't shooting up as they did during the Great Inflation of the 1970s.
The economic malaise of the late 1970s, including the Great Inflation and record peace- time unemployment rates led to the election of Ronald Reagan in 1980.
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The great inflation of the 1970s (price level up 150%, gold 20 times, oil 14) is attributable to the rise of fiat money and not much else.
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That bubble would burst, of course, but during the great inflation Silicon Valley stopped funding technology companies, got greedy, reached beyond its core competency and began funding business models.
Really impressive things, such as evidence of the Great Inflation, the big growth that came 10 to the -35th of a second after the Big Bang and made our universe possible.
With the unemployment rate still above 9%, and federal debt at record levels, this latest error by the monetary authorities is likely to be the most costly since the Great Inflation of the 1970s.
By contrast, during the 41-years since going off gold, the U.S. has suffered the Great Inflation of the 1970s, two of the worst recessions since the Great Depression, and now a dozen financial crises.
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In fact, the two biggest economic disasters of the 20th century--the Great Depression in the 1930s and the Great Inflation of the 1970s--were both the result of catastrophic government mistakes, not a sudden failure of free-market capitalism.
The Great Inflation of the 1970s was caused by repeated bouts of excessive money printing by the Federal Reserve and other central banks in the mistaken belief that government could eradicate the normal ups and downs of economic activity.
Every economic disaster during the last 100 years has its origins in bad government economic policies, from the Smoot-Hawley Tariff, which triggered the Great Depression, to the Federal Reserve's excessive printing of money, which brought us the Great Inflation of the 1970s and the recent housing bubble.
The great upthrust of the immigrant working class into the middle class after World War II, via the GI Bill, was stopped stone cold by the events of the autumn of 1973, when the October war in the Middle East led to the quadrupling of oil prices virtually overnight and the great inflation set in.
You can also see the impact of the Volcker policies at the end of the 1970s, breaking the back of inflation and ushering in the Great Moderation of low inflation, low interest rates and low unemployment.
Investors aware of history can see disturbing similarities with the Great Asset Price inflation of the mid-1930s which culminated in the Roosevelt recession of 1937-8.
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Profits have already recovered from the Great Recession, and inflation constraints ought to hold back profits now.
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Inflation is the great hidden tax, especially when it hits essentials like food.
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If we examine the behavior of inflation over the past 10 or so years, we would see that the rate of inflation had been consistently moving up until the Great Recession hit in 2008.
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The rest of account holders' money was untouchable for the next 18 months, by which time it was worth a great deal less, thanks to the very inflation that the move had been designed to reduce.
Inflation became the next great fear to drive investors to gold.
For tiny investments, the Is are a great deal, paying only half a point less than the tradable inflation-indexed Treasurys.
They acquired great resonance in the 1970s, when inflation and excessive government borrowing and spending had become the norm.
The second is that everything else that the government owes in the future is now a great deal more inflation protected than it used to be.
The conventional wisdom is that Fed monetary policy has been extremely easy, there is a great potential for an acceleration in inflation already baked in the cake, and a return to quantitative easing would be a drastic step.
Cowen acknowledges many hiccups in the broad income growth measures (possible overstatements of inflation and understatements of quality of life) but says the great preponderance of evidence leaves no doubt: our standard of living is stuck.
Not only is that real estate a great inflation hedge, it gives the company total control over both the upkeep of stores and occupancy costs.
Having paid penance for the Great Depression by suffering through six decades of inflation, it is time for us to revive old-fashioned logic concerning the potential benefits of deflation.
Contrary to Keynesian predictions (and a great deal of empirical evidence on the inflation-unemployment tradeoff), we were confronted for the first time with the combination of rising unemployment and inflation.
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The fall in oil prices since August has been a great help, at a stroke both bringing down headline inflation rates and boosting the incomes of consumers.
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