As Far as the Eye Can See: Stagnation

I've read Jesse's blog for some time.  He grew up in the U.S. and has international business experience in different continents.  I appreciate his insight and wisdom stemming from Christian humanism.

From Market Shadows:

Ilene: Jesse, thank you for doing another interview with me. I’m continually learning from your rational, and brilliant, insights into the markets, and more importantly, the human nature upon which they are built. It’s always a pleasure to explore your thoughts as events unfold.
Previously, when we discussed ‘flations, you believed we were heading into a stagflationary period. Not hyperinflation–you didn’t think prices would spiral up uncontrollably. Has the Fed’s new QE-Infinity program changed your mind?

Jesse: No, not at all, QE infinity was always within expectations, because of the way in which it has been constructed, in addition to the failure of the fiscal side of the house. The President and the Congress control fiscal policy, and the Fed controls monetary policy. “Fiscal” is how the government obtains and allocates money. It also involves setting priorities, tax policies, tariffs, etc. Fiscal policy is failing to do its part to reform the system that caused the financial bubble and collapse in the first place, and the Fed is manipulating monetary policy and its regulatory powers largely in the service of the financial sector.

Ilene: Would you describe the economic condition as “stagflation” now?

Jesse: Yes, given the very low GDP and employment growth, and the inflation. The inflation, while not presenting itself broadly, is rather high in necessities like food, healthcare, and energy. It is not very pronounced but that is what I would call it. I would also accept “stagnation” for those who are fussy about how to measure inflation.

Ilene: You’re not very optimistic that a true reformer will show up and begin the process?

Jesse: No, and I am increasingly concerned that the powerful few are going to provoke a false flag or some draconian response to even modest and non-violent demonstrations. That will remind us that the reforms of the 1930s were born out of some serious conflicts that we have not seen in the US in quite some time. Typically these historical cycles overshoot, and this case looks to be no different.

http://www.marketshadows.com/2012/10/16/another-drink-with-that-stagnation-jesses-cafe/