Economist Gary Shilling says the US is now on the path to serious inflation

Tom McKay

Economist Gary Shilling says the US is now on the path to serious inflation. Everybody is worrying about the Fed tapering, but this only concerns an initial small reduction in the $US85 billion per month in securities and Fed purchases, most of it going into excess reserves. These surplus reserves, the difference between required reserves and total, now total a gigantic $US2.2 trillion and growing. When the economy resumes normal growth after the Age of Deleveraging is over, these excess reserves will spawn huge loans and money expansion, propelling the economy past full employment and into serious inflation. So the Fed's major job is to get rid of these excess reserves by selling securities. Tapering (adding more to this hoard) is just the start. (VIEW LINK)


About this contributor

Tom McKay

Tom McKay

Managing Director and Co-Founder, Livewire

I'm the Managing Director and Co-Founder of Livewire. I'm passionate about collecting and curating the markets most informed insights every day so that our members can discover new investment ideas. If you would like to get in touch - please use...

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economy inflation usa

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