"The third important point is that economic slowdowns usually
trigger massive reflationary responses from the Fed that reignite
inflation. Such was the response in 1958, then again in 1970 (not
described here), in 1974, 1980, 2001, and currently in 2007-2008.
Anytime the Fed has responded by massively reflating the economy,
the typical result has been stagflation."
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fwiw
The Deflation Scare
Posted by ravun on 24th of Jun 2009 at 04:36 pm
"The third important point is that economic slowdowns usually trigger massive reflationary responses from the Fed that reignite inflation. Such was the response in 1958, then again in 1970 (not described here), in 1974, 1980, 2001, and currently in 2007-2008. Anytime the Fed has responded by massively reflating the economy, the typical result has been stagflation."