Money Worries IV

Prices move through the economy as crude goods -> intermediate goods -> finished goods, increases reach the consumer after a lag.

Money Worries III

Historical perspective from 30 years ago:

Troop levels peaked in Viet Nam in 1968. The war had been costly and the government had run deficits to pay for it. About five years later with inflation accelerating, Richard Nixon did one of the dumbest things ever by imposing wage and price controls throughout the economy.

The oil exporting nations of the Middle East got upset that their dollar payments were declining in value (they were also angry about US and Western European support for Israel) so they formed OPEC and imposed an oil embargo on Western nations. Oil prices rose dramatically. Policy changes under Reagan and Volcker and a serious recession around 1980 finally brought inflation down.

Money Worries II

The Social Security gap is an issue that politicians have talked and warned about for 20 years. But being so far in the future it was basically dismissed as noise - too many other urgent problems to deal with. Now the funding gap problem is only about 10 years in the future, which means it moves into the planning horizon for budgetary purposes.

Money Worries I

Major currencies are increasing in value versus the US dollar. Equivalently the dollar is losing value against all major currencies.

Euro



Yen



British Pound



Swiss Franc