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This paper argues that the US economy is not entering a new era of prosperity, mainly because the rote of profit remains 30-40% below its earlier postwar peaks, in spite of a 20% reduction of real wages since the early 1970s Under these conditions, real wages are unlikely to increase very much (if at all) in the years ahead. The paper also argues that an important reason for the acceleration of growth in the US economy since 1995 is a large and rapidly increasing net inflow of foreign capital (which also precipitated the worsening depression in Asia).The final section argues that the chances of a recession in the US in 1999 are high, and that such a depression would probably propel the world capitalist economy into deep depression. [ABSTRACT FROM AUTHOR]

Along with Tom Hoenig, I feared the inflation consequences of the Fed's asset purchases. Mr. Leonard slips uneasily between goods price inflation and asset price inflation, as shown by the following passage. "Note that, unlike others, I worry less about the threat of inflation down the road, something that will become clearer later in the book ... " Mohamed A. El-Erian, I The Only Game in Town i ([2], p. 25) By late 2021, Mr. El-Erian may have recalibrated his worry meter. Legislation defines, though somewhat vaguely, the goals the Fed is to achieve: Put simply, the Fed is to achieve full employment, price stability, and financial stability. [Extracted from the article]