Click here to get this article in PDF
Project Syndicate/James K. Galbraith/3-31-2021
“The scale of US President Joe Biden’s American Rescue Plan (ARP) – $1 trillion in spending for this year, another $900 billion after that, plus a $3 trillion infrastructure and energy program that has been promised – has spooked many macroeconomists. Are their fears justified?The bank and bond-market economists, having cried wolf before, can be disregarded. A year ago, many of them warned that the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act would incite hyperinflation by massively increasing the money supply. It didn’t happen.”
USAGOLD note: Galbraith says concerns about inflation are overblown and takes Lawrence Summers to task for his criticism of big spend and print programs – an argument among economic liberals. If we do not need to worry about inflation, we should probably consider the dangers of disinflation, possible deflation and major systemic risks, a reminder of which we just received from the Archegos debacle, i.e., the black swan event. As for hyperinflation, we would simply remind that no one in Germany in the upper echelons of government, academia, finance and industry worried about hyperinflation during the 1920s until it struck suddenly and with full force – one of the more devastating black swans in Western economic history.
The post Today’s top gold news & opinion first appeared on Today’s top gold news and opinion.