Today Henry Thornton’s editor, Peter Jonson, reviews a BIS report on the outlook
for inflation. The BIS compares the current situation with that in the
late 1960s and early 1970s.

1. Like today, the late 1960s and early 1970s was “a period when both
short- and long-term interest rates were low in real terms, while credit
expanded rapidly.”

2. A second parallel with the past is that
America’s loose monetary policy is being exported to the rest of the
world.

3. Another “ominous similarity” with 30-odd years ago is the jump in
the prices of commodities and oil.

4. Last but not least, governments’
budget deficits have widened sharply in recent years, just as they did before
the Great Inflation of the 1970s.

Read on here.

Peter Fray

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