The economy is slowing while oil and gold prices are rising – stagflation is the early sign of financial trouble and lower standard of living
Peter Oberois
Aug. 5, 2007

Stagflation was a phenomenon that plagued the developing and poor nations for decades – perhaps centuries. Stagflation always forces a country to devalue the currency. Now stagflation has gotten hold of the US and European economies. In order to avoid financial meltdown, the US dollar is devalued in a slow but steady manner.

The net effect of this is lower standard of living in the next several decades. It is estimated that the US consumers will spend 60% of their expendable income on servicing the debt. That says stagnation is rampant and depression is possible.

Stagflation is evident from rising unemployment, lower jobs in quality and in numbers, higher commodity prices, and above all fast rising gold price.

When oil and gold rises simultaneously, inflation in the economy is clear. But when at the same time, the economy falters due to excessive borrowing by the common people, corporations and the Government, the net effect is stagflation.

Stagflation is the worst thing for any stock market. The market can go down or go sidewise. In either case, the stock market loses over time value to inflation in the system.

The economy is slowing while oil and gold prices are rising – stagflation is the early sign of financial trouble and lower standard of living
Peter Oberois
Stagflation is the worst thing for any stock market. The market can go down or go sidewise. In either case, the stock market loses over time value to inflation in the system
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