Busted: Bankers and The Global Economy

June 15, 2008

The Pressure of Global Inflation

“Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable, and may increase global inflationary pressure.” says the G8 central banking community. At the same time, U.S. Treasury Secretary Henry Paulson said the high oil price “brings the risk that the slowdown in our economy is going to be prolonged”.

Henry Paulson admitted that the United States has experienced a “sharp rise” in inflation. The U.S. position increasingly appears to be seeking to put a floor beneath the dollar’s fall to protect the U.S. economy from increased inflationary pressures from rising import prices. Just how the Treasury Department and the Federal Reserve are going to accomplish this feat remains to be seen. One truth seems certain: inflation won’t be affected by lowering interest rates.


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