Inflation Biggest Threat to U.S. Economy in 2010
In 2009, we saw the monetary inflation created by the Federal Reserve's zero percent interest rates drive up the prices of U.S. stocks, without dramatically increasing the prices of U.S. consumer goods. We consider 2009 to have been a brief period of euphoria, before a rapid increase in the prices of food, energy, clothes and other necessities Americans need to live and survive. With Goldman Sachs and JP Morgan employees taking home record bonuses this month, it's only a matter of time before this money works its way through the system.
We saw an artificial boost in the U.S. GDP this year because of government stimulus spending. In our documentary 'The Dollar Bubble' we spoke about how the destructive 'Cash for Clunkers' program accounted for 42% of the U.S. government's reported 3.53% GDP growth in the 3Q of 2009. However, on December 22nd, the U.S. Bureau of Economic Analysis revised 3Q GDP growth down to 2.24%. After this latest revision,'Cash for Clunkers' now accounts for the overwhelming majority of the reported GDP growth in the 3Q. Adjusted for real inflation, U.S. GDP is actually contracting today.