Screwflation, like its first cousin stagflation, is an expression of a period of
slow and uneven economic growth, but, its potential inflationary consequences have an outsized impact on a specific group. The emergence of screwflation hurts just the group that you want to protect — namely, the middle class, a segment of the population that has already
spent a decade experiencing an erosion in disposable income and a painful period (at least over the past several years) of lower stock and
home prices. Importantly, quantitative easing is designed to lower real interest rates and, at the same
time, raise inflation. A lower interest rate policy hurts the savings classes — both the middle class and the elderly. And inflation in the costs of food, energy and everything else consumed (without a concomitant increase in salaries) will
screw the average
American who doesn’
t benefit from QE 2. -- Doug Kass
