Saturday, May 7, 2011

Chimerica's Slippery Slope to Stagflation_English_Caixin

Chimerica's Slippery Slope to Stagflation_English_Caixin - Recommended reading

As my friend Free Market points out in his post, "In the end, Osama Wins" a giant welfare and and warefare state are not benchmarks for freedom. This sentiment is echoed by Andy Xie in his article for Caixin online. Mr. Xie writes, " Healthcare, the financial sector and the military industrial complex account for about 30 percent of the U.S. economy – more than twice the levels found in other developed economies, or in the United States three decades ago. This suggests the United States is carrying a 15 percent extra cost to generate the same output. Of course, the economy should be slow.

But the U.S. government is trying to simulate the demand side to solve a supply-side problem. That doesn't resolve the problem but instead creates a new one – inflation. No amount of monetary stimulus by the Fed can bring high growth back to the United States, in my view."

I highly recommend this article for your review.

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