We’re returning to the ‘70s era of social decay, crime, and stagflation – Scott Rothbort (Pt. 1/2)

The most dangerous part of the recently released 4.2% headline inflation, the highest since 2008, is the fact that higher labor costs haven’t even kicked in yet, said Scott Rothbort, president of LakeView Asset Management.

Rothbort said that the economy is headed to a situation where we will have much higher inflation but low economic growth, a condition known as stagflation that was prevalent in the 1970s.

“There are two elements to inflation. You’ve got the cost element, and that comes from commodities and input prices, and you’ve got the wage element, and that comes from labor demanding more wages. What we saw in the 1970s was that it became a vicious feedback cycle,” Rothbort told Kitco’s anchor, David Lin.

The end result of this vicious feedback cycle is that small businesses, which on an aggregate level contribute to about 50% of America’s GDP, will be unable to afford paying much higher wages and thus cut staff, increasing unemployment even more.

0:00 – Higher labor costs will come
9:14 – Higher unemployment
18:05 – How high can inflation rise?

__________________________________________________________________
Kitco News is the world’s #1 source of metals market information. Our videos feature interviews with prominent industry figures to bring you market-affecting insights, with the goal of helping people make informed investment decisions.

Subscribe to our channel to stay up to date on the latest insights moving the metals markets.

For more breaking news, visit

Follow us on social media:
Facebook –
Twitter –
StockTwits –

Live gold price and charts:
Live silver price and charts:

Don’t forget to sign up for Kitco News’ Weekly Roundup – comes out every Friday to recap the hottest stories & videos of the week:

Join the conversation @ The Kitco Forums and be part of the premier online community for precious metals investors:

Disclaimer: Videos are not trading advice and the views expressed may not reflect those of Kitco Metals Inc.