When inflation
is high due to wars, government overspending and high consumer demand, prices
increase. Interest rates were high along with high inflation in the 1960s,
1970s and 1980s. When interest rates settled down under 7% in the 1980s,
investors went to stocks.
When
interest rates are higher than stock returns, Investors move to fixed
investments like mortgages.
In the
1930s, inflation fell to a negative (-18.6%). Asset prices dropped. Farmers
lost their farms in the Dust Bowl. Workers lost their jobs and businesses
closed.
The stock
market crash in 1929 should have been met with lower loan rates and infusions
of cash from the Federal Reserve to save Banks.
1929 0.6%
1930
-6.4% Depression
1931
-9.3%
1932
-10.3%
1933 0.8%
Roosevelt
1934 1.5%
1935 3.0%
1936 1.4%
1937 2.9%
1938
-2.8%
1939 0.0%
In the
1940s inflation rose 54.9%
1940 0.7%
1941 9.9%
WWII
1942 9.0%
WWII
1943 3.0%
1944 2.3%
1945 2.2%
1946
18.1% High Demand
1947 8.8%
1948 3.0%
1949
-2.1%
In the
1950s inflation rose 23.5%
1950 5.9%
1951 6.0%
1952 0.8%
Eisenhower
1953 0.7%
1954
-0.7%
1955 1.4%
1956 3.0%
1957 2.9%
1958 1.8%
1959 1.7%
In the
1960s inflation rose 25.3%
1960 1.4%
Kennedy
1961 0.7%
1962 1.3%
1963 1.6%
1964 1.0%
Johnson
1965 1.9%
1966 3.5%
1967 3.0%
1968 4.7%
Nixon
1969 6.2%
In the
1970s inflation rose 74.1%
1970 5.6%
1971 3.3%
1972 3.4%
1973 8.7%
1974
12.3%
1975 6.9%
1976 4.9%
1977 6.7%
Carter
1978 9.0%
1979
13.3%
In the
1980s inflation rose by 48.5%
1980
12.5%
1981 8.9%
Reagan
1982 3.8%
1983 3.8%
1984 3.9%
1985 3.9%
1986 1.1%
1987 4.4%
1988 5.5%
1989 4.6%
Bush I
In the
1990s inflation rose by 28.3%
1990 6.1%
1991 3.1
1992 2.9%
1993 2.7%
Clinton
1994 2.7%
1995 2.5%
1996 2.3%
1997 1.7%
1998 1.6%
1999 2.7%
In the
2000s inflation rose by 25.4%
2000 3.4%
Bush II
2001 1.6%
2002 2.4%
2003 1.9%
2004 3.3%
2005 3.4%
2006 2.5%
2007 4.1%
2008 0.1%
2009 2.7%
Obama
In the
2010s inflation rose by 17.1%
2010 1.5%
2011 3.0%
2012 1.7%
2013 1.5%
2014 0.8%
2015 0.7%
2016 2.1%
2017 2.1%
2018 1.9%
Trump
2019 1.8%
Healthcare
and Education costs quadrupled because they were over-subsidized by government
and consumers could not control the prices.
Norb Leahy, Dunwoody
GA Tea Party Leader
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