Stagflation or what is also known as “recession-inflation” is continued high inflation combined with high unemployment and stagnant demand for goods and services because of their high prices in a country’s economy. The term was coined in 1965 by British politician Iain Macleod. It is seen as a rare event. However, stagflation has been persistent in the world since the 1970s. Stagflation is extremely difficult to cure because policy solutions to slow growth tend to make inflation worse and vice versa. The reasons for stagflation cited by economists range from oil price shocks like OPEC‘s quadrupling of oil prices in October 1973, to poor economic policies to the loss of the gold standard in August 1971. Therefore commodities like precious metals, industrial metals, and other agricultural goods can help weather a period of stagflation. I’m Stewart Brown, a licensed Mortgage Loan Originator in Palm Springs, California here to simply topics in Real Estate and Mortgage Lending. Please, like, share, follow and subscribe!
