To get around these roadblocks, the Fed lowers the cost of labor through inflation.
Of course, American policies could hurry it up, in particular by trying to reduce the debt burden through inflation.
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Particularly when the less painful way to reduce debt and the interest paid on that debt is through inflation via QE.
However, printing money merely encourages people to spend their savings now rather than wait for it to lose value through inflation.
As the massive, global credit bubble continues to unwind, both through inflation and defaults, gold will continue to rise against commodities.
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Moreover, China has been able to partially pass through inflation to other countries, as the export price index has risen by 11.9% since last September.
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Most likely, the federal government will solve the problem through inflation.
However, it is being corralled into financial instruments like bonds, which may well be about to be annihilated through inflation, rising interest rates, recession and austerity.
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Phelps' principle established that initially you could get greater economic activity through inflation but that eventually people would catch on, and the medicine would lose its potency.
It could indeed default through inflation, could indeed decide to default as the least bad option, but it cannot be forced into a hard default as they can.
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We think the U.S. and ultimately Europe will be headed in the same direction in terms of sustainably low real rates, at first through low nominal rates and later through inflation.
On the other, it must ensure that this year's rise in inflation, which it thinks will be temporary, does not become entrenched through higher inflation expectations.
Nevertheless, a further sharp fall in the dollar would eventually feed through into inflation.
In the past few weeks credit has started to trickle through and inflation has come down slightly, helped by a rising rouble.
However, since you cannot always get tax rates high enough to meet your spending plans without also damaging the economy, you tax wealth through planned inflation.
In the past, borrowers had to pay through the nose at the outset but they benefited from the rapid erosion of mortgage debt through high inflation.
Since that is the period it takes for interest-rate changes to work their way fully through to inflation, the forecast implies that the Bank will keep rates at 4.5%.
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But will the Fed's tactics of fighting deflation (which is intrinsically a good thing for creditors) through monetary inflation ignite a virulent new strain of inflation (which kills bond returns and drives down their prices)?
So for each dollar of corporate welfare that is cut, we save more than one dollar, either through less inflation, reduced interest expenses, increased future private sector spending (due to lower taxation), reduced government costs, or all of the above.
But it is a signal moment when an Anglo-Saxon economy, wedded to the ideology of inflation targeting for the past 20 years, suddenly begins to "look through" the inflation figures.
Separately, wholesale-level inflation will likely begin seeping through to consumer-level inflation.
Due to low inflation in prior months, year-over-year inflation through August was just 1.7 percent.
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And even then it likely takes some time to work through slack before inflation moves to worrisome higher levels.
Fighting inflation through higher interest rates never works, but central bankers always try.
Consumer demand is high in Russia, helping push inflation through the roof.
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The US dollar went through periods of inflation and deflation in this period and its value was independent of the price of gold.
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They would freeze all domestic discretionary spending for three years and cap future increases at the rate of inflation through the rest of the decade.
Instead, the government was trying to control inflation through unorthodox measures, such as limiting the price of petrol or slashing electricity tariffs and taxes on car sales.
Having introduced dramatic measures to stem inflation through the year, most governments have plenty of options to loosen policies and stimulate demand as developed markets slow in the first half of 2012.
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