Politics

How ‘Stagflation 2.0’ affects the West – and the East

The world’s problem is not merely inflation any more. A new type of recession must be included, adding up to a situation described by a mixed term (circa 1965 UK), “stagflation.” I will embellish the idea, making it Stagflation 2.0. It is a problem existing right around the world, in Asia as well as the West. 

The recession portion of version 2.0 is, oddly enough, accompanied by, at least so far, relatively low unemployment, but high levels of citizen complaint and general dissatisfaction. Consumers have jobs and money, sometimes money for which they did not even have to work to get. But store shelves are often empty, while packages and serving sizes shrink. 

In Asia, dollar earnings from sales of goods exported to the US don’t buy as much as they did formerly, because of American inflation. US interest rates, slated to rise beginning in March, will depress the value of fixed-rate Asian investments in US debt instruments, those funds having been earned and accumulated in days before then-president Donald Trump’s tariffs began to make it marginally more difficult for Asian companies to sell things to Americans.  



Source link

Leave a Reply

Your email address will not be published.

close