NIA criticizes Washington’s approach to inflation threat
August 24, 2009 by Personal Liberty News Desk
A new statement from the National Inflation Association (NIA) suggests the government may be running the risk of hyperinflation on purpose and warns the asset bubble burst may mask the growing problem.
In its latest effort to make Americans aware of the dangers of out-of-control inflation, NIA has said the origin of the current financial crisis in the bursting of the housing market bubble, and the resulting temporary fall in real estate prices, is making it difficult to see the underlying inflationary pressures.
"Nobody will see inflation in the form of rising prices until excess inventories are done being worked off," it predicts, adding the situation is aggravated by the fact that the stimulus money is not being spent on creating productive manufacturing jobs. Rather, the only area where employment is rising are non-productive government jobs.
NIA also suggests the enormous deficit and the government’s indebtedness that resulted from it has created a situation where inflation – which benefits debtors but hurts creditors – is beneficial for the government.
Finally, it calls on the Federal Reserve to raise interest rates from the current effective rate of 0 percent to counteract the threat.
At its latest meeting earlier this month, the Federal Reserve Board decided to keep the interest rates unchanged, citing the apparent near-term sluggishness of the U.S. economy. It also dismissed the threat of inflationary pressures.