Is the U.S. Becoming an EMERGING MARKET?

In this second part of their discussion on structural inflation, Trish Regan and Rob Hordon of 76research address several topics. Are we facing stagflation? How can investors preparing for retirement protect themselves from the erosion of their purchasing power? They discuss "fiscal dominance," the economic scenario, often found among emerging market countries, in which high public debt loads start to dictate monetary policy. The key idea behind fiscal dominance is that a central bank is required to generate nominal (or inflationary) growth in the economy so the government can generate the tax revenue necessary to pay the interest on its debt.

With high debt, high inflation, and high interest rates (not to mention other political and social developments), Trish and Rob speculate whether the U.S. itself is turning into an emerging market country. Geopolitical tensions are driving substantial increases in military spending and foreign aid, which only exacerbates America's debt problem.

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