Bernard Baumohl Economic Quotations

There are signs that indicate economic strength might strain the economy, which would cause inflation.

Katrina has shaken the very foundations of the U.S. economic expansion when it ruined much of America's energy infrastructure, ... While a recession is unlikely, the probability of stagflation has greatly increased with inflation moving higher even as the economy slows.

The sharp pullback in economic growth during the final three months of 2005 shows the law of gravity has not been repealed. When consumers are burdened with heavy debt loads, rising interest rates, higher energy costs, no personal savings and household income growth that falls below inflation, something had to give. This retrenchment in spending was generally foreseen, though economists weren't sure on the timing and magnitude.

The central bank seems more worried than before that resources feeding the U.S. economic expansion are getting scarce.

The latest batch of economic news does not paint a very encouraging picture on the sustainability of consumer spending.