A real time experiment

Inflation 3.56% (current trend down)
Unemployment 9.20% (current trend up)
Inflation 4.2% (current trend down)
Unemployment 7.7% (current trend down).
We see that the UK is recovering from the crunch better than the USA. The two economies are very similar except that the USA is printing money at a greater rate. This amounts to an economic experiment on the virtues of deficit financing. So far the more conservative approach is working.
We might also add that unemployment benefits are far more generous in the UK and this caused unemployment to be about 4% higher than it should be.
The official inflation figures of both nations underestimate inflation as it experienced by the poor. This is because food and energy are increasing at a faster rate than luxury goods.
These pressures are largely caused by currency devaluation and are easing in the UK as sterling may be near its floor. The dollar is predicted to fall further.
N.B Everything in this post is an oversimplification.


Post a Comment