Tags: Goyette | High | Inflation | Crisis

Charles Goyette: 'High Inflation Crisis' Looms for U.S.

By    |   Friday, 16 March 2012 02:12 PM

Runaway government spending and excessively loose monetary policies are set to send U.S. inflation rates spiking, says Libertarian author Charles Goyette.

To combat what it saw as deflationary threats and uncomfortably high unemployment rates, the Federal Reserve bought trillions in mortgage-backed securities and Treasury bonds from banks during the past couple of years, flooding the economy with inflation-fueling liquidity in the process.

Considering all that liquidity remains in the economy while government spending remains rampant, consumer prices are set to soar.

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"I'm afraid the stage is already being set right now and it's certainly a high inflation crisis. You can see the incipient signs of rising prices in all kinds of areas," Goyette told Newsmax.TV in an exclusive interview.

A good portion of that excess liquidity has ended up in commodities markets, which has sent crude and food prices rising.

"These things don't start going up because of the phases of the moon or because of the weather," said the author of the recently released “Red And Blue And Broke All Over.”

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"The rises in commodities prices across the board is a result of the Federal Reserve trying to monetize the deficit and give the politicians cover for their irresponsible spending by printing the money to cover it up so we don't have to go out and borrow it," Goyette says.

The Federal Reserve isn't the only culprit, as central banks worldwide have been flooding their respective economies with liquidity to stave off recession without giving thought to the inflationary consequences that tend to follow.

"We're not the only ones doing it. The Bank of England is doing it, the Bank of Japan. China is inflating, even the Swiss for crying out loud, and the European Central Bank. We have a global problem of money printing that's going to explode in our faces in the next year or so."

Such a monetary policy is technically known as quantitative easing, although critics say asset purchases from banks are merely money printing.

The best way to get the economy growing again and really bring down unemployment rates, which remain well above pre-crisis levels, is by letting the private sector heal on its own.

"As far as the unemployment rate, the single best thing we could ever do is we have to get government out of the picture."

Fiscal stimulus measures don't work, as they run up the government's debt burden without creating lasting employment, Goyette says.

"When World War II ended, the federal government cut spending by two thirds and this country boomed like you cannot believe. We haven't had a boom like that since. And they cut spending by two-thirds to achieve it."

Don't blame President Barack Obama and the Democrats alone, Goyette says, as Republicans deserve their fare share of the blame as well.

Bipartisan attempts at streamlining the overwhelmingly bloated U.S. public debt burden end up in political impasses and are too toothless to make an impact anyway.

"They come up with bipartisan commissions and they're going to cut $2 trillion over nine or 10 years — that's $200 billion a year. We had one month I think it was last month or month before where we ran a $200 billion deficit just in that month," Goyette says.

"Normally we're running at least a $100 billion deficit a month ... Not only is the country broke, but the red party and the blue party are both into this thing up to their eyeballs."

Editor’s note: To order ‘Red and Blue and Broke All Over' at a great price — Click Here Now.

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Friday, 16 March 2012 02:12 PM
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