Money Magazine: Inflation Wave Coming
The latest issue of Money magazine is warning of a significant trend for the coming year — the Federal Reserve will reinflate the economy, spurring significant inflation.
In its “Investor Guide 2011,” the magazine identifies inflation as the top trend investors need to watch for in the new year.
“After listening to recent statements by the Fed, I’m convinced central bankers will reinflate this economy by any means necessary,” Pat Dorsey, director of equity research for Morningstar, writes in Money.
“Yet it’s hard to reinflate the economy just enough to get job creation going, but not so much that inflation remains perfectly in check. In fact, there are precisely zero historical examples of that kind of macroeconomic fine-tuning, which means the risk of the Fed overshooting is high.”
Dorsey isn’t alone in warning of looming inflation. Billionaire investor Warren Buffett said at last year’s shareholders meeting of his Berkshire Hathaway Inc. that “the prospects for significant inflation have increased.”
He said more recently that “a country that continuously expands its debt as a percentage of GDP and raises much of the money abroad to finance that, at some point, it’s going to inflate its way out of the burden of that debt.”
Other financial experts who see inflation on the horizon include Robert Wiedemer, co-author of the best-selling book “Aftershock,” who in 2006 predicted the economic meltdown, and Richard Rahn, chairman of the Institute for Global Economic Growth.
David Skarica, author of the new best-selling book “The Great Super Cycle: Profit from the Coming Inflation and Dollar Devaluation,” says that the Federal Reserve and other central banks are actively inflating their currencies to monetize staggering debt loads.
This, in turn, will lead to a significant dollar devaluation with the greenback set to devalue by as much as 50 percent during the next few years, Skarica says.