What Is a Dollar Worth?
The Federal Reserve Board announced:
“Information received since the Federal Open Market Committee met in January indicates that the economy continues to contract. Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. Weaker sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. U.S. exports have slumped as a number of major trading partners have also fallen into recession. Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.
In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.”
However, there is a growing debate as to the impact of the federal trade deficit. According to the Congressional Budget Office, President Obama underestimated the growth of deficit over the next decade by over $2,000,000,000,000. The Budget Office predicts the deficit to grow to $9,300,000,000,000.
What if that is still an underestimate? Sen. Richard Shelby believes the deficit will reach $20,000,000,000,000. At such a staggering number, it is hard to believe that inflation won’t rear it’s ugly head and run rampant.