If you live long enough you’re most likely going to become just like your parents. Some of the traits are desirable some less so. Mom’s laugh. Dad’s nose. Your former mother-nation’s crippling stagflation and negative GDP.
Peter Schiff, president & CEO of Euro Pacific Capital says the near-term fate of the colonies is being foreshadowed across the pond. “If you look at what’s happening in Britain right now you have a glimpse of what’s about to happen in the U.S.,” he states.
If Schiff is right, our sluggish economic growth is about to roll into mild economic contraction. GDP in the UK as a whole has declined 3 of the last 4 quarters and is forecast for more of the same this year.
Of more concern is the rising inflation rate. Governor of the Bank of England Sir Mervyn King said last week that he expects the 2.7% current rate of inflation to rise to at least 3% by summer and to remain above the bank’s 2% target for at least two years. This marks a reversal of King’s November prediction that inflation would begin to decline by the end of 2013.