A. Tom Vergados "It’s Official: The Crash of the U.S. Economy has begun"

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) August 2, 2008 -- Stagflation is the painful combination of recession and high inflation. It's pain comes from the fact that during stagflation most Americans (USA and Canadian)won't be able to increase their incomes fast enough to keep up with the inflation. And many will lose their jobs as unemployment rates will surge. Here are some facts:

- BBC NEWS | Business | Airbus confirms 10000 job cuts
- Alcatel-Lucent posts another loss, plans 4,000 more job cuts - MarketWatch
- Pfizer Cuts 10,000 Jobs - Forbes.com

- Wireless News; Motorola unveils 4000 job cuts for 2008
- Sprint to cut 4000 jobs - CNET News.com
- CTV.ca | Bell Canada announces it will cut 2500 jobs
- 3M announces layoffs; some jobs to be cut in Decatur
- Dell will cut more jobs than the 8800 it announced last year
- BBC NEWS | Business | Aviva to cut 1800 insurance jobs
- IBM announced it will cut 1556 jobs from its global workforce.
- Fujitsu will cut 16400 jobs as part of its global revamp.
- ABC News: Northwest Airlines to Cut 2500 Jobs
- Schultz Announces 1000 More Job Cuts at Starbucks

- Kodak announces manufacturing reductions in United States and China; 900 jobs cut. Eastman Kodak Co., Rochester, N.Y., USA
- Yahoo will cut 1000 jobs this year, more than had been expected.
- Sears Canada announces it will cut 1200 jobs
- Yahoo will cut 1000 jobs this year, more than had been expected.
- EETimes.com - Update: Infineon to cut 3000 jobs
- Volvo announces job cuts of 2000 employees
- Siemens announces big job cuts, said about 5250 workers will lose their jobs.
- Bank of America announces plans to cut 3000 jobs after poor 3Q
- Chrysler Announces Plan To Cut 13000 Jobs
- Citigroup announces 17000 jobs will be cut - USATODAY.com

- Hershey announced that it plans to eliminate 1500 jobs
- Macy's Will Cut About 2300 Jobs|NewsChannel 8
- Wyeth Announces That 1200 More Jobs Will be Eliminated : Bio Job Blog
- Air Canada To Lay Off 632 Flight Attendants - Congoo
- Schering-Plough to Cut 5500 Jobs - - BioPharm International............

This time around we're going to experience what I call Hyper-Stagflation because the skyrocketing price of oil will make this bout of inflation much more uncomfortable than any in the past.

The Federal Reserve won't be able to help as their traditional tools will be of little or no use.

Raise Interest Rates?

The usual approach to reducing or controlling inflation is to raise interest rates. That slows the economy down and in effect pours water on the inflationary flames.

But if they do that during stagflation, inflation will indeed be reduced but at the same time reducing interest rates slows the economy which adds to the already high unemployment rate.

Reduce Interest Rates?

When jobs are lost and the economy is in or near recession the Fed usually lowers interest rates in an effort to boost overall business activity and get people back to work. But if they do that during stagflation it will increase inflation to even higher levels.

With stagflation we will be between a rock and a hard place with no effective government policy to come to our aid. That's why stagflation is so agonizing and frustrating.

But the coming age of stagflation will be different from all others. Few Americans realize just how much of impact the price of oil has on our lives. When the cost of energy goes up, the cost of almost everything we buy climbs in concert.

Half of our food supply is produced through the use of petroleum and natural gas based fertilizers. Plastics, pharmaceuticals and much of our metal is made with oil.

Changing Times     Hard Times