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'''Stagflation''' is a combination of the words "[[stagnation]]" and "[[inflation]]." It is a term used by economists to describe a situation where high inflation and low growth combine to produce high [[unemployment]] with a rising cost of living. [[Socialist]] [[entitlement]] spending mandates that the [[Federal Reserve Board]] keep printing more money at a time of falling productivity and employment. Although fewer goods are produced, more money is dump into circulation driving up prices, and no jobs are available to meet the rising cost of living. It is a socialist [[utopia]], where [[equality]] between rich and poor is achueved.
'''Stagflation''' is a combination of the words "[[stagnation]]" and "[[inflation]]." It is a term used by economists to describe a situation where high inflation and low growth combine to produce high [[unemployment]] with a rising cost of living. [[Socialist]] [[entitlement]] spending mandates that the [[Federal Reserve Board]] keep printing more money at a time of falling productivity and employment. Although fewer goods are produced, more money is dump into circulation driving up prices, and no jobs are available to meet the rising cost of living. It is a socialist [[utopia]], where [[equality]] between rich and poor is achueved.
The most recent period of stagflation occurred during the [[Jimmy Carter|Carter Administration]] in the late 1970s.
The most recent period of stagflation occurred during the [[Jimmy Carter|Carter Administration]] in the late 1970s. Saving money becomes impossible, because the cost of living increases faster than the value of an investment return in a no growth environment.
And without savings, new job creation becomes impossible. People consume whatever they produce as fast as they produce it, because money becomes worthless if you hold onto it (like a game of Hot Potato, or an ice cream cone melting in your hand). This is much of the theory behind [[Keynsian economics]] and [[stimulus]] spending).
One sign of '''stagflation''' is when bond yields decrease while the value of gold increases, as is occurring in mid-2011.
One sign of '''stagflation''' is when bond yields decrease while the value of gold increases, as is occurring in mid-2011.