• Inflation, Like Kotter, Is Coming Back

    squirrelHey gang! Dust off those KC & The Sunshine Band albums, dig out your rayon leisure suits and get ready for a retro-economic romp through the dyn-o-mite fields of inflation, the likes of which we haven't seen since a peanut farmer was in office. (What the hell does that mean? You guys, I am so stoned.)

    All I know is, the markets are down again today because everyone's afraid the Fed will raise interest rate targets by September, which means the Fed — and therefore everyone else — is now afraid of inflation.

    Remember that? The thing that used to be the worst thing that could happen to the economy?

    The S&P 500 trimmed its third straight weekly advance on June 5 as concern higher interest rates will threaten an economic recovery overshadowed a better-than-estimated employment report. U.S. stocks last week extended a three-month rally that lifted the S&P 500 by 39 percent since March 9 as the government and Federal Reserve pledged $12.8 trillion to end the first global recession since World War II.  [...]

    “We’re still in a terrible recession, but the recession is slowly ending,” said Thomas Nyheim, a Greenville, Delaware- based fund manager for Christiana Bank & Trust Co., which oversees $4.6 billion. ‘With all that money coming in from the unprecedented stimulus, you know you’re going to get inflation.”

    Good lord.

    If I didn't know better, I'd be tempted to think the entire economy is an elaborate system of tradeoffs in which every outcome is just as bad as the others, except for slightly different reasons.

    Tags: Economy, Federal Reserve


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