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Show f Making a Comeback Lakeside Review North, Wednesday, July 20, 1983 Professor Fears More Inflation to Come Prices may seem to be going down, but Dr. Dale R, Hawkins, a professor of finance at Weber could be required to finance the deficit by 1985. Right now the budget is 85 to 90 percent out of control.' Hawkins blames the current deficit problem on Lyndon B. Johnsons strong emphasis of funding for social programs. He said that before the Johnson administration the economy experienced a modest money supply increase of less than two percent with wholesale price rises of less than two percent State College, said that double digit inflation could be back within the year. Hawkins said, Prices bot-- , tomed out sometime in April 1983 and have since then been slowly climbing back up. Hawkins said that the govern-- , ment has reduced inflation and . - . brought interest rates under control, but in a monetarist sense, the cure may be worse than the disease. Hawkins explained that the problem lies with the Federal Reserve Boards decision to in-- , crease the money supply in July of 1982. That move triggered a response in the stock market that brought highs in stock market volume and prices all-tim- federal reserve board and international action, but beyond that he said he has serious reservations. He said, Hopefully the money supply will gradually decrease until it is equal to or less than the increase in productivity and hopefully well get out of these deficits. If we dont were going to go through hyper inflation and a crash and the ride back to a barter economy would be rough. on the per year, . Beginning in 1965 all that changed with the government spending vast amounts for social programs, He said, Im fearful of what will happen if we continued to have the rise in money supply we are currently experiencing. We could see rises in prices coming very soon." Hawkins predicted the economy would be fairly steady through most of 1984 depending ($ V&m OS QftltifS e because of a tremendously increased money supply, Hawkins explained. He said, Money supply has been expanding at an unprecedented rate of 15 percent since July 1982. This explosive rate of money expansion cannot continue without sowing seeds for violent inflation. According to the Weber State professor the additional money supply means consumers are likely to spend more. That, in turn, will bring price increases much earlier in the business cycle. He said, The price index of Industrial Raw Material, a very sensitive scale, is showing that prices have been rising very rapidly. Hawkins continued, Weve got to do something. We cant continue to expand at this rate. No way have we solved the problem of inflation. This could be a very short lived recovery. He pointed out that the feder- 5C YOUR PICK-U- P Lakeside Review FOR ALL THE NEWS OF YOUR COMMUNITY a 3 Ei EACH WEDNESDAY fflsmgjQlQ fflj al reserve board increases money supply by buying U.S. marketable bonds which allows banks to make more loans. A' He noted that banking systems are required to keep a certain percentage of the amount they loan in a reserve required deposit with the federal reserve. If the banking system were to loan $100,000 they r SAVE (Off Mfg. Sugg. Price) is created, he said. He noted that our monetary system has become' very complex in its organization and is dependent on many variables, the real powder keg being international finance. 99.62 10Rxl5 178.93 118x15 191.62 128x15 204.28 Front 107.62 114.62 1 22.62 2.93 to 5.53 Four full plies of polyester cord ban- - 31.62 33.62 36.62 33.62 32.62 39.62 41.62 378-1- 3 173-1- 4 873-1- 4 073-1- 4 560x13 073-1- 3 H78-1- S Plus St 44 to $2.49 F.E.T, on ilz. On the international finan-- , cial level we are sitting on a keg of dynamite. Only the thinnest amount of confidence keeps us . . FET Vi" 40-P- 57.62 60.62 62.62 From 1.64 to 2.96 8.38" W 62 UlLl txrnis -- auo. 1 j it fimgxcoupoN rrmr ALIGNMENT 8 Front End Sofoty Check Sot camber, i me 1 w Chovottoi Extra 11 g tttixpirk xuasiirngS 355 ime and aga;n, NCej02f youve heard it said, To make money, you have to have moneyr The truth is, you have to knovv how to sav e money before you can think about - 1? making more. Thats why more and more people are joining the , Payroll Savings Plan to buy U.S. Savings Bonds. That way, a little is taken out of each paycheck automatically. In no time, vou'll have enough Bonds for a new ear, our childs education, ev en a dream vacation. Whatever you save for, Bonds are the safest, surest way to gain capital. ; :i: AMs' 3JaGiTPiS &X& iUsdl) . V' 52.62 54.62 56.62 54.62 DRIVE COMBO SOCKET SET Inch and metric sizes finrAOTUiUiUiasiT like 2 sets in one. p ii 47.62 48.62 ?piX3COUPON Hawkins said. He pointed out that in order to function with a deficit the government must absorb savings which are then not available for industry or private needs. The net effect is a rise in interest rates and the curtailing of any economic growth. He noted that deficits have been doubling every year since Reagan took office. If this trend continues the absorption of all savings, 100 percent of it, II pw Hr. dwawiding he said. The federal deficit is another critical area in the economy, l3 P185 - 75Rxl4 P195 - 75Rxl4 P205 - 75Rx14 P215 - 75Rx14 P225 - 75Rxl4 P205 - 75Rx15 P215 - 75Rxl5 P225 - 75Rxl5 P235 - 75Rxl5 for strength, stability and stamina. A dependable, smooth riding tire at an economy price. Offers positive traction wet or drv. kruptcy, he said, it will wt art a domino effect that could close many majqr U.S. banks and in-- , itiate a financial collapse. . P165-80Rx- BENCHMARK POLY sums of money, but cant make payments on their loans. If afloat, 85.62 166.40 FET Hawkins said that over 20 countries owe U.S. banks large those countries declare 8.5Rxl4 142.12 9Rx15 $10,000 ! ON DESERT DUELER would need $10,000 on deposit. If they had $11,000 on deposit, however, the bank could simply create an additional $10,000. ' Thus, with the stroke of a pen , 40 F S |