Despite staggeringly low interest rates and multiple rounds of quantitative easing, inflation so far has not put in an appearance. A new report in the Wall Street Journal suggests that this may be beginning to change. A survey of local businesses conducted by the Federal Reserve of Atlanta reveals that while most believe that short-term inflation will stay below the Fed’s target rate, long-term inflation is expected to reach nearly three percent, well above the Fed’s comfort level.This is just one survey and reports expectations rather than experience, but inflationary bouts often start that way — like the small cloud no bigger than a man’s hand that sometimes is the first sign of a great storm (1 Kings 18:44). Watch closely; signs of returning inflation would quite quickly create serious problems for a global financial system whose chief survival strategy these days is to print tons of money and hope inflation stays away.There does not seem to be a Plan B if this fails.
Small Cloud No Bigger Than A Man’s Hand?