The idea of stagflation for the US just can come from a goldbug...

The idea of stagflation for the US just can come from a goldbug that never put himself to the task of discovering what the word does really mean.

For those that don't know "it is a term used in economics to describe a situation where an inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high."

During 1979 the inflation rate in the US was on average 12% while now is bellow 1.5%. Why high inflation rates then? Because after a huge rise in oil prices [actually two huge external shocks in economics parlance] central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway price/wage spiral.

Yes runaway price/wage spiral, but that is not happening now. There has not been any wage spiral.

BUT MORE IMPORTANTLY, stagflation was predicted by the Friedman-Phelps natural rate hypothesis which said that the apparent positive tradeoff between inflation and unemployment would prove only temporary, and that once inflation had gone on for a while, disinflation would involve a period of both high inflation and high unemployment.

However now the model in use and so far with very great predicative power is not the Friedman-Phelps natural rate hyptotesis, but the Keynesian model of insufficient aggregate demand which tells that in a liquidity trap, the printing of large amounts of money is not INFLATIONARY.

Goldbugs everywhere, first went around like headless chickens shouting hyperinflation, hyperinflation is coming, but because 4 years later we are still waiting for it to arrive they are now crying lowd stagflation is back, stagflation is back.

One may buy gold for one thousand different reasons, but if one is doing it know thinking that that the US is suffering from stagflation than one would only be buying it for the wrong reason.

By the way, during the 70s unions enjoyed a lot of power and wage contracts did have an inflation clause, resulting in workers and bosses increasing their pay and the prices of their goods IN ANTICIPATION of future inflation rates. So, if the expectation was for inflation to be 6% unions then would ask for at least a 7% pay increase, a demand that the bosses would accept by increasing the price of their goods accordingly.