There is a threat of a rapid rise in inflation

The current relative calm in financial markets and low consumer price inflation are no reason to sit back and relax. Previous periods of soaring inflation, rapidly rising interest rates and financial crises followed periods of excessive indebtedness like a sudden wind without warning.

Shultz and Taylor’s book Choose Economic Freedom shows that economic indicators in the US in the late 1960s gave no indication of the subsequent sharp rise in inflation and interest rates in the early 1970s. Likewise, in the years immediately prior to the Great Recession of 2007-09, the financial markets provided little evidence of the disaster that followed.

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