Stagflation Risk: Stephen Roach Latest Economist to Sound Alarm on 70s-Style Inflation

Stephen Roach is the latest high-profile economist to sound the alarm on the risk of a 1970s-style stagflation—where economic growth falls but inflation stays stubbornly high. The former Morgan Stanley Asia chairman told CNBC in a Sept. 29 interview that the energy price spike is inflicting major damage to struggling supply chains and that he believes the United States is “one supply chain glitch” away from a 70s-era bout of stagflation. His remarks came as gasoline stations were running dry in Britain, power costs were surging in the European Union ahead of winter, and amid rising prices for oil, natural gas, and coal. In the interview, Roach spoke of supply chain bottlenecks shifting from one part of the supply chain to another rather than easing, a situation he called “strikingly reminiscent of what we saw in the early 1970s” and one that “suggests that inflation will stay at these elevated levels …

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By Kelly Sanchez

All you guys are warned: Be aware of Granma!

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