Alan Greenspan’s thoughts on inflation

Advisors Capital Management/Alan Greenspan/10-25-2021

photo of Alan Greenspan, Ronald Reagan, James Baker, Howard Baker 1987

“[M]onetizing the debt cannot be a long-term solution, and increases in the money supply relative to the real goods and services an economy produces will eventually lead to higher price levels. While there are signs that part of the recent rise in prices may be due to transitory effects, if, as I suspect may be the case, inflation is likely to be a threat on a more sustained basis, further fiscal stimulus may push monetary policymakers to be less accommodative if they want to avoid setting off demand-side inflation.”

USAGOLD note: Now 95 years old, Alan Greenspan has been near the seat of power for much of his long and storied career. As a result, what he has to say about the current economic situation carries considerable weight. He concludes now that inflation is likely to be more persistent than the Fed would have us believe and that we may be heading into a stagflationary economy. Yesterday, we linked a summary of his views. The link above goes to the original analysis for those who would like the benefit of Greenspan’s thinking without the spin of the news services.

Image: President Ronald Reagan at an economic meeting with Alan Greenspan, Howard Baker, and James Baker in the West Sitting Hall of the White House, 10/20/1987

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