The U.S. is likely to face rapidly escalating inflation within the year, as the government moves to print money quickly, a new report suggests.
According to CIBC World Markets, the Obama administration will print money "at an unprecedented rate" to fund an economic stimulus package and address the growing federal deficit.
Jeff Rubin, chief economist and strategist at CIBC World Markets, compared the coming inflation crisis to that of Argentina in the late 1980s and Zimbabwe today.
He added that there is also an American precedent for driving up inflation by printing money. For example, inflation was in the double-digits in 1947 after a World War II deficit, while the periods after the Korean and Vietnam wars also showed similar effects.
Rubin predicted that although consumer price index inflation is currently falling, it could be at more than 4 percent within a year.
"Already the U.S. money supply is growing at a nearly 20 percent rate in the last three months and the printing presses are just warming up," he said.
December figures showed consumer prices increased by the smallest percentage in the past 54 years.