Stagflation-Lite?

Here's my reaction to the government's GDP report and the Fed rate cut...

Is another big name from the 1970s attempting a comeback? Stagflation, the worst-of-both-worlds scenario in which weak growth is accompanied by robust inflation, may be on the radar again. It's enough to conjure memories of President Gerald Ford's ill-fated campaign to talk down prices through a "Whip Inflation Now" (WIN) campaign. The risk is evident in the latest economic numbers. Indeed, Marc Faber, the widely followed global investment adviser based in Asia believes that "we're already in stagflation: no real economic growth--or recession--amidst inflation" in his latest Gloom Boom & Doom Report.

.... The risk for business, consumers, and investors is the emergence of a different kind of stagflation--call it "stagflation-lite." It would be defined by higher-than-expected inflation rates (say, a 5.6% increase in the CPI) and lower-than-expected growth rates (like a 0.6% economic expansion).

You can read the full article at www.businessweek.com.