Busted: Bankers and The Global Economy

March 6, 2008

State of the U.S. Economy by the Fed’s Mishkin

Filed under: federal reserve, money — Tags: , , , , , , , , — digitaleconomy @ 4:11 pm

The U.S. economy is facing substantial challenges. The housing sector continues to weaken, production and spending in other parts of the economy have decelerated, the labor market has softened noticeably, and the turmoil in financial markets has led to a reduced availability and a higher cost of credit to many households and businesses. Indeed, real gross domestic product (GDP) rose at an annual rate of only 0.6 percent in the fourth quarter, and the available data suggest that the economy has relatively little momentum going into the first quarter. Moreover, upward pressures on inflation have emerged, emanating in part from the rapid increases in prices of crude oil and some other commodities.”

The Fed finally comes around to telling most of the truth. It’s a bit late, but the public word is finally out. Mishkin is not summarizing however. The description that Mishkin provides is strongly reminiscent of the meaning of the word “stagflation”. How long will it take for the Fed to admit to this truth? The stopwatch of truth is running.

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