From SGTreport.com…
On Monday, Deutsche Bank released a report that further confirms a portent of doom for the U.S. economy and Democrats led by President Joe Biden.
While many economists and policymakers claim that the recent uptick in inflation is temporary, Deutsche Bank warned that Biden’s profligate spending, the Federal Reserve’s low interest rates, and global economic trends threaten to unleash persistent inflation, which amounts to an insidious tax on the poor and middle class that benefits the government.
“Few still remember how our societies and economies were threatened by high inflation 50 years ago,” David Folkerts-Landau, Deutsche Bank chief economist and head of research, wrote in a paper co-written by his colleagues Jim Reid and Peter Hooper. ” The most basic laws of economics, the ones that have stood the test of time over a millennium, have not been suspended. An explosive growth in debt financed largely by central banks is likely to lead to higher inflation.”
“We worry that the painful lessons of an inflationary past are being ignored by central bankers, either because they really believe that this time is different, or they have bought into a new paradigm that low interest rates are here to stay, or they are protecting their institutions by not trying to hold back a political steam roller,” Folkerts-Landau added. “Whatever the reason, we expect inflationary pressures to re-emerge as the Fed continues with its policy of patience and its stated belief that current pressures are largely transitory.”
