Federal Reserve Chairman Ben Bernanke said Wednesday he does not believe the United States will experience the out-of-control prices seen with 1970s oil shocks.

Bernanke’s remarks come just one day after he said that the Fed’s rate-cutting campaign was coming to an end because of increasing concerns about inflation.

 

Submitted: Jun 4, 2008    Views: 101    Comments: 1    Likes: 3   


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Sam Cass
Sam_Cass

The difference between today and 70s style inflation is that in the 70s company's raised salaries to help employees keep up with price increases. Today, they are not. So, everyone is getting poorer on a daily basis. You can argue that this is good because it prevents inflation from spreading but we're really seeing is a massive loss of spending power and wealth by most Americas. Prices go up but salaries stay the same.

We may also be more energy efficient but oil is now far above where it was in the 70s in inflation adjusted terms. There also wasn't a painful housing crash to deal with.

He's right, things aren't the same. In many ways they appear worse.

Posted: Jun 6, 2008



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