Austrian economist Hans Sennholz servys the inflation/deflation controversy and forecasts that we are headed for stagflation, an inflationary period of economic stagnation:
Deflationists observing booms and depressions correctly recognize and analyze the harmful policies of national treasuries and central banks. They perceive the cyclical instability of a hampered market order but blithely overlook and ignore all other forms of government intervention that impede, thwart, shackle, and curb economic activity and lead to deep depressions. And they pass over the peerless position of the U.S. dollar as the world’s primary reserve currency, which allows the Federal Reserve System to inundate the world with U.S. dollars – until the principal creditors, China and Japan, call a halt to the delusion. At that time, the U.S. government may contrive a Bush or Kerry Deal, similar to the Hoover-Roosevelt Deals. We are bracing for fervent controls and dreary stagflation to come.
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